WTF? What is the point of home insurance if you are penalised for making a claim?

[codswallopandbalderdash]

OK. I am in major rant mode. After 10 years of not making a home insurance claim, we've had a bad year - a stolen mobile phone (got £150 on insurance) and building damage from all the sodding snow earlier this month - claimed £500.

So my current home insurance company has doubled my premium for next year so I've started shopping around. Guess what? Four phone calls later and four companies refusing to insure us. Apparently it makes not a jot of difference that we claimed less than £1,000 - I was told it would have been better for us had we had one big claim!

By the end of the last phone call I was sighing and muttering what is the point of having insurance if you are penalised for making claims. I am pretty appalled that this is the way the industry operates and there is stuff all I can do about it. I have paid thousands of pounds in insurance over the years ...

Anyway, I just wanted to let others know how bloody home insurance works - try not to claim and if you do make sure it is for a large amount because you are going to be penalised.

I always think of these insurances as useful for a big claim (total flood/burglary, that sort of thing) where the premium hike would be worth it but I wouldn't bother for less £1000 personally. It seems to be the way they work - attract you in with a low quote then put the cost back on if you claim.

Pinkprincess I did the same thing, dark paint on a pale carpet. DrBeekham carpet cleaner really worked

When people base their insurance choices based on price only, thats when they end up with crappy policies that dont cover 2 week holidays. Its always worth checking the small print

We found damp damage in our utility room, under the floor. Insurance sent a man out and said 'you're not covered for this' then classed it as a rejected claim. I said, we haven't claimed yet, and if we're not covered, then we won't claim, obviously.

But they write the rules

They put the premium up, but we shopped around and renewed for less.

Insurance is gambling: you are gambling that your house will burn down. They are gambling that it won't. Who do you think wins, most years?

araiwa
When people base their insurance choices based on price only, thats when they end up with crappy policies that dont cover 2 week holidays. Its always worth checking the small print

It wasn't cheap, however absolutely check the small print! AND don't let them fob you off with a 'cover booklet', like we did! Insist on hard copies of the policy and check it through thoroughly!

Fortunately we're in a position to sort this without the insurance, but not everyone is. Lesson learned the hard way!

Of course it a complete con, but it gets tragic when it's about life or medical insurance.

We all understand that premium get up when you make a claim - which in itself is not fair, but being refused insurance because you have made a claim is ridiculous.

I agree with above, we've never made a claim so far, home or travel, we just hope we won't have a full sinister or accident. It is an absolute con.

I remember something on Watchdog as well: if you call asking a question, about something being stolen or damaged, it counts as a claim! You have never made one, so you tick "no claim" on your next application, but because you "lied", your policy is invalid.

I thought people knew that your premium would go up if you made a claim so its not worth making little claims.
If you had a house fire you would be thankful for it

Thanks folks for mixed replies. My insurance quotations have never reduced prior to this despite not having any claims and shopping around. I was told then that major incidents (e.g. lots of other people making claims because of unusual storms) tended to put premiums up generally.

Frankly it pisses me off that I am penalised for small claims when I know someone who lost huge amounts of expensive personal possessions in a burglary (think 4 apple laptops, iPads, phones, jewellery etc) and claim was settled. Then ignoring the advice of the police to get a burglar alarm / change locks was broken into again 6-8 weeks later when all items had been replaced by insurance, only have to claim again. And claim was settled again!

You should have Building Insurance but this covers a lot, including theft and damage by water. Most mortgages require building insurance.

Contents insurance is another matter though. I wouldn't bother, unless you live in a mansion with loads of valuables.

Your mistake op was claiming for things under £1500/£2000.
I made a claim 4 years ago for a gaming laptop as I spilt a drink on it when gaming was getting a little heated and I got a bit over zealous. This year my premiums went down at last.

We did a quote for ours this year as the policy had got more and more expensive.... from around £200 to over £500. All was going swimmingly and we had a great price of around £280, which I'd said go ahead with..... until the guy said "i need to put you on hold" and then quadrupled the price as i hadn't declared an incident. Last claim we made was in 2007!! So I then asked for the details, and basically I phoned our insurers about 4 years ago when I dropped my epilator on the bedroom carpet. It's a weave/loop type so pulled a big hole, so I rang to ask what the rough cost of the excess would be and we decided in the end not to claim and shoved a rug over it. Bastards then recorded it as an "incident" and it's now made us more or less uninsurable with any other company. Furious doesn't cover it. I'm now chasing the insurance bureau to get it removed but having no luck. I feel your pain OP. It's a complete bloody con, and legal.

How is it a con? As PP said it is a gamble, or risk transfer, you transfer the risk that something disastrous befalls your house, car, you etc to the Insurer for a set sum.

If the disaster happens then you have only paid the nominal sum yet they pay out the full amount.

If you claim and they pay out then your premium has to go up, the idea being that the people who claim should pay more than the people that don't.

The storms causing damage to many homes is a reason prices went up

Every question you answer when getting a quote will either increase or decrease the price of your insurance. 2 claims in a year will 100% increase your price and prices may have gone up generally too

You should have Building Insurance but this covers a lot, including theft and damage by water. Most mortgages require building insurance.

Yes, I should have made that clear, I have buildings insurance, but contents? Nope.

TBH, the only reason I have fully comp on my car is that by my age, it's sometimes cheaper than TPFT (I guess because I look more dodgy looking for the minimum)

All insurances are the same, for example, I hit my car a couple months ago, I wasn’t bothered about my car but I scratched someone else’s nice new car (just a small mark on their wheel arch), the car owner would not let me pay myself and wanted to claim through my insurance, the work on her car probably cost a few hundred at the most. My insurance came up for renewal a month later and my quote was for almost £2000 a year compared to the £500 I payed the previous year. Luckily I found it cheaper elsewhere but I’m still shocked about the £2000 quote just for scratching a car.

I have never claimed on my house insurance, probably never would unless my house was flooded or burnt down.

JaneEyre70
That's exactly what the Watchdog report was about, it's disgusting.
moral of the story is to use a fake name to ask for information, and print all details of your excess and so on, and never call your insurance about anything.

How is it not a con to be penalised for asking a question without making a claim?

For car insurance I always pay a bit extra for NCD protection. Had a very minor bump just like pp describes and my insurance went up a teeny bit due to it but it would have been way worse if I’d lost my NCD

Doesn't contents insurance also cover fittings such as kitchen, bathroom and carpets etc?

My DH has convinced me over the years that insurance is a scam.

He will only buy it if:

1. It is illegal not to do so - eg car insurance

or

1. The item is of such high value replacing it would represent a serious financial loss - eg the house (but not the contents)

This used to make me really nervous but over the years I can see there is much common sense in it. However you do have to be reasonably well off to take the risk entailed in this approach or you wouldn't be able to sleep at night

I had a psychology lecturer who said that insurance is pointless, just a way of making money. I never bothered with it, but dh insists. We've never made a claim. How much money are we chucking away every year, I ask him often. He won't listen.

Doesn't contents insurance also cover fittings such as kitchen, bathroom and carpets etc? It covers fittings but not fixtures. So you;'d look to claim on Contents for the damaged carpet but on Buildings for a cracked sink.

jux Yes but what would you do if yoru house burned down? would you be able to afford a rebuild and contents yourself?
I only get insurance for this,as I think theres nothing worth stealing in here, everything is held up with duck tape.

Jux you and my DH are on the same wavelength!!