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.

Insurance is like a casino- you bet you'll not need it and the company bets that you will need it one day-and like a casino the house always wins one way or another

And I speak as someone with 10+years of working in the insurance industry!

I do agree however in all aspects try and avoid claiming when you can as it's just not worth it in the long run for premium increases etc

the worst is being penalised because someone else damages your property: car insurance when the guilty party disappear, friend smashing your belonging and so on

Rachie I don’t want to derail the thread but what you’ve said sounds nonsense to me and I have a lot of experience in insurance claims. If you know the leak happened within 3 hours of you leaving home then there’s no way in hell voiding your policy for this reason should have got past the underwriters. If you want to PM me I’d be more than happy to help.

insurance isn't a scam. The trouble is that people are overinsuring themselves. Don't buy insurance for items that you can comfortably replace because of the excess and premiums rises.

Insurance should be for things you can't easily replace (your house, car, health etc).

To complain about your insurance claim declined, you'll need to make an official complaint to the company first. They have up to 8 weeks to resolve your complaint. If you're not happy with their decision, then you have 6 months to take your case to the financial ombudsman.

It is definitely a con when it comes to car insurance (bitter experience) because we have to have it. And it doesn't pay a thing and punishes you for asking. Bullshit.

Omg so your telling me that your premiums go up when you've claimed on your insurance?!? Thanks for the info OP, what a scam #TheMoreYouKnow

o your telling me that your premiums go up when you've claimed on your insurance?!?

why don't you read the thread first...

There are some ugly aggressive people on here. Do you think it is fair that you are penalised for using the service you are paying for?

when insurance refuse to pay a claim, if they can get away with it, then at least they should refund ALL the premiums paid. They cannot take your money and then refuse to pay off.

I think insurances are a con that we are forced to take out. We had damp from an upstairs neighbours (council tenant) broken boiler. It had been an ongoing problem with a leak of boiling water pouring onto our property for months on end, which we had ample video evidence of. Tried to make a claim from Councils insurer who told us they werent responsible and Id have to fight it legally (couldnt afford that). Claimed through our own insurance , first they tried to get out of it by claiming we hadnt told them it was a tenanted property, thankd fully we had proof we had informed them, and the Surveyor came out to the house, seen the damp, watched the video evidence and agreed it was an due to the upstairs neighbour. Then we got a letter saying the damp was due to poor maintenance of our shower cubicle (it absolutely wasnt). It took a further 14 months of wrangling before our insurance finally paid up (with the 2nd impartial surveyor agreeing with us and couldnt understand why the insurance were trying to dodge the claim). They are all a bunch of con artists, happy to take the money but will do anything and everything to get out of paying out. However at least this was only bricks and mortar, Id hate to be in America and fighting with health insurance companies whilst simultaneously dying from want of treatment.

I'm an insurance solicitor and see every day exactly how much insurance companies spend when big things go wrong. I don't think insurance is a con so long as you choose a decent insurer, tell the truth when you take out the policy and understand you can challenge decisions if you disagree.

Don't get me started on car insurance, our second car is barely worth £100 yet our insurance is £500 a year with a £300 excess what is the point?

...our second car is barely worth £100 yet our insurance is £500 a year with a £300 excess what is the point?

Really?

Is your £100 car immune from crashing into a £250,000 Ferrari?

Does it being worth £100 prevent you from running someone over and leaving them paralysed and needing 24hr care for the rest of their life?

Only a small part of car insurance is paying to cover your own (potential) loss.

“Insurance is a scam”

Does anyone really believe this?!? You’re not being coerced into buying it. If you don’t want to insure your property then don’t bother, but the sensible reason for doing so is that if it burns down you won’t be able to fork out however much money to buy somewhere else, the insurance company is taking on the risk for you.

And of course it goes without saying that you should read the policy docs carefully and check they cover what you want to cover.

PPI - a good example of an insurance scam! They are now having to repay ££££££££££££££££££££££s!!!!

You’re not being coerced into buying it. If you don’t want to insure your property then don’t bother

You don't have the choice of buying a car insurance or not, neither have you got the choice of building insurance when you have a mortgage. So unless you chose to have neither car nor home, there's no choice is it.
And yes, it is a scam for all the reasons listed above.

Only a small part of car insurance is paying to cover your own (potential) loss.

the cars I have owned are pretty cheap, so I usually do not insure damage done to my car. And yes the 500 pounds is for when you hit another car.

@ikeepaforkinmypurse the mortgage provider insists on insurance because the house is their money until you've paid it off and if it goes up in flames they want their money back. Hardly a con. I'd want proof you were taking steps to protect MY asset that you don't own until you've paid it off. Once it's paid off, you're free not to insure it and lose it all if things go tits up.

Legal cover is worth it on car insurance. MrNC got the car written off by a tosser driving on the wrong side of the road, and minor injuries. Insurer didn't want to contest the claim of the tosser who had told the police a pile of cobblers.
Called the legal firm who poked the police and found recording of guy being told to lie by his father on the phone. After about a year, the claim paid out for the cost of the car, hire cars and physio - well worth it. Have also claimed for a stolen satnav - we live on the sort of street where they assume people will have frequent thefts, so we're paying for that risk priced in already.

Similar with home insurance - no mainstream insurer will touch us as we have a lodger, but the specialist one has coughed up for two lots of storm damage in 10 years with only a minor increase in premium. Though they did want a lot of evidence for the second claim, and three quotes from builders, so that took a while!

I'm still bitter though about the travel insurance claim which was parked for a year and then they decided as my passport only had six weeks left on it when it was stolen, I was only entitled to 6/500ths of the cost of a 10-year passport if I'd replaced it in this country, rather than the extra £300 I had to pay to get it replaced in a consulate overseas. Columbus Insurance may have a cute dog but customer service stinks. (some insurers do specify that passports are only covered for the fraction that is still valid. My policy didn't and said 'cost of replacement'. I was too busy giving birth to chase it any further).

the mortgage provider insists on insurance because the house is their money until you've paid it off

Thank you, I get why you need insurance, I was replying to the poster who wrote something in the line of "no one is forcing you to take a cover". Well, yes, the law and the mortgage company, no choice there.

Just to point out I understand the money also covers damage to other cars yet our other newer more valuable car costs £250 to insure with a much smaller excess surely the same risks and any pay out likely to be larger.

Thanks for replies everyone. I stopped ranting ages ago. It's just the way it is ... but I think I will be reducing my contents cover and looking at what we are actually insuring ...

I know companies pay out on the big stuff but I also think some of the rules are stupid. A company insisted that my friend stayed in a hotel for 9 months while her house was renovated following flood. She could have rented a flat for much less money (and pointed this out to them)

Surely the main point for insurers is to prevent fraud and reduce risk to themselves. It still seems a bit mad to me that risk isn't based on amount you've had to claim as well as number of times claimed ... I personally don't think two claims in 10 years is excessive - just bad luck

I'm a big fan of self insurance for the small things and proper insurance for the big things.
I'll never forget a friends house burning down and them being left with nothing but the pyjamas they were standing in. Everything gone. No insurance. It was an absolutely awful time for them and it made me a little obsessive about good contents insurance but no stupid add ons. Travel insurance for medical/accidents. Again a friend with a broken leg while in US. The bill came to hundreds of thousands. That's what I'm paying for not a lost mobile.
Self insurance for smaller things; mobile phone, lost handbag, smashed TV, stained carpet I put away £30-50 a month in a separate account. If incident happens I dip into it. If not nice little savings account