Lazy customers just opt for cheap insurance

Homeowners and drivers are so peeved about prices and jumping through hoops to make a claim that they just go for the cheapest insurance cover available.

Few bother to search for the best insurance to suit their needs, according to a study by price collective group Incahoot.

This leaves a massive three out four people opting for insurance cover on price alone.

Even worse, 14% of insurance customers do not bother claiming off a policy because the process is too much bother, while 22% swallow the cost because excesses on their policies are too high to make a claim worthwhile.

Many insurance policy holders have excesses adding up to £200 or more of the first claim, which is often around the same cost as repairing or replacing the loss or damage, making completing the paperwork pointless.

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Insurance prices soared by around 40% for drivers and 15% for homeowners last year, said a study from the AA.

While research from specialist insurer Hiscox revealed most homeowners underestimate the value of their possessions by around 66%.

 John Evans, from Incahoot, said: “Price is important, but with insurance as most things, it’s rarely the whole story. Merely comparing prices could be a short cut you’ll regret.

“Britain’s obsession with low price insurance has gone too far. We found only 7.4% of us choose insurance based on a personal recommendation, with just 4% taking tips from a broker.”

 Looking for cheaper insurance

The problem for many consumers is that insurance comparison sites do not do their job properly because some insurance firms, like Direct Line, choose not to list their deals with them.

That means a customer never knows whether they have the best or most cost-effective cover without spending time on several web sites or making phone calls as well.

This is good for the insurers – Direct Line want you to believe their policies are cheaper so you get a quote even though they may rank as more expensive – but not so good for comparison sites because customers can never trust the results as the definitive quote for their cover.

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One Response to Lazy customers just opt for cheap insurance

  1. Adam says:

    The problem with price comparison sites is that they do just that – compare prices. Often the quality of the service comes a distant second, especially for something like insurance. Most people consider insurance as a formality, something that you are required to have. Whilst this is true for certain types of insurance, people don’t think enough about the types of claim they are likely to make.

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