Cheap insurance policies could affect your insurance claim

March 5, 2013 6:42 am

There was a really sad story in the press a couple of weeks ago about a couple whose house was burgled while they were in A&E with their 11-month-old daughter. They thought they had adequate home insurance but, when they made their claim, it turned out that they hadn’t read the small print carefully enough.

The problem was with the valuable items which were stolen. These amounted to £27,000, and they thought there would be no issue as their policy covered them for contents of £50,000. However, the small print on their policy stated that valuables in the home could amount to no more than one third of this, which put a maximum on this aspect of the claim at £16,667.

Be careful with comparison sites

The couple had taken out their insurance through a comparison website. These can provide a useful way of choosing a policy – and saving money. But they can also result in choosing the wrong policy.

In fact, consumer champion Which? raised doubts recently about them. In particular, it warned that, because these sites use pre-selected answers and assumptions, this creates ‘one size fits all’ policies which may be unsuitable and could be declared invalid if a claim is made. It appears that this happened with the couple featured in the press.

Useful advice from Which?

Which? published some really useful advice for users of comparison sites, which we would advise anyone taking out a policy in this way to read:

  • Check all questions for pre-selected answers as missing anything could affect your premiums and could jeopardise any future claims.
  • Check all details carefully to make sure you’re getting the cover you need.
  • Obtain quotes direct from insurers as well as through comparison sites as not all insurers will be listed.
  • Watch out for unwanted extras if you click through to the insurer’s site.
  • Read the privacy policy to check how your personal information is going to be used.

 

Taking out the cheapest home insurance is helped significantly by the ease of using comparison websites to shop around. But it can be a false economy. If you do swap to a cheaper policy, it’s vital to make sure that you’re still getting the cover you require. If you don’t, and disaster strikes, then you may find it impossible to reach a satisfactory settlement with your insurer.