Is cheaper better?

Everyone likes a bargain but, when it comes to insurance, the price shouldn’t be the only thing you base your choice of policy on and if your insurance adviser only ever recommends the cheapest policy, you should ask yourself if you are getting the best advice.

Insurance is no different to many other products; there can be a wide range of providers, and the end product is pretty much the same. Or is it? The price of something like a car can vary greatly from the budget basic car to the luxury supercar. You wouldn’t expect the budget car to do the same as a luxury car, and the same is true of insurance. A policy at the lower end of the price range is not likely to perform the same as a more expensive policy.

A simple property insurance policy could range in price from £200 to £700 and no two policies will be exactly alike. Insurers will offer differing levels of cover – some will include accidental damage automatically, others will give “standard” cover, which offers reduced cover. Some will include cover for things like replacing locks if you lose your keys, and the excess payable will differ from policy to policy. A common exclusion from some property policies at the lower end of the price range will exclude claims for damage caused by failure of grout or seals. A simple exclusion that if not understood, could see you left to foot the bill for many thousands of pounds.

Before you even consider the price of a policy, you need to look at whether it is going to be suitable for your needs. Some insurers refuse to insure a property if it becomes unoccupied, some will increase the premium but restrict the cover to certain perils, and others will continue to provide full cover, subject to certain requirements. If you have a property that is likely to become unoccupied for any length of time, you may consider that the £200 policy where the insurer will want to cancel cover as soon as it become unoccupied may not be worth it.

Whilst the larger international insurers will no doubt be able to put in very competitive prices, they will usually have some quite rigid requirements that do not necessarily reflect the way of life in the Channel Islands. A good example of this is minimum standards of security. Some will require alarms, ram raid bollards, window bars and other expensive ant-theft measures. Local insurers have a better understanding of the islands, and although they have slightly higher premiums, it is difficult to put a price on local knowledge, and even more so on local service and flexibility.

So if your insurance broker is only ever recommending the lowest price, you should consider seeing what else is out there that could offer better value for money, and better suit your needs.

Our brokers are ready to help you and talk through the various options available to you.