/ Money

Insurance: beware the twists that could catch you out

Insurance concept

How many of you spend the time to trawl through the terms of your insurance policy, checking what’s covered and what’s not? Have you ever considered the small difference that could play with your premium price?

When insurance policy documents are full of baffling jargon and can stretch to the size of a novel, it’s no wonder some people don’t bother reading the small print.

Insurance policies are ‘too long and complicated’ and use ‘incomprehensible jargon’ – that’s what people told us in our recent survey. Around half (49%) said they think insurance policies are ‘fairly’, or ‘very’ difficult to understand. Many people admitted they only bother to skim read the terms and conditions, including 40% of those with car insurance and 39% of those with home insurance.

But, discovering exclusions often comes at the worst possible moment – when you attempt to make a claim.

What could inflate your insurance?

We’ve gathered hundreds of quotes from the biggest insurers to find unknown quirks and exclusions that affect the price you pay.


Insurance confusion

Do you find insurance T&Cs confusing? Most policies offer a summary of cover to highlight the main exclusions, but that doesn’t stop people getting caught out by details they’ve missed in the small print.

So, have you come across companies using complicated jargon, or hiding tricky conditions in documents crammed with tens of thousands of words?

Perhaps you’ve found an insurer that keeps things simple – by making their documents easy to follow and using plain English?

Comments
Profile photo of alfa
Member

We decline the 5% discount for having window locks.

If we were burgled and the windows were unlocked, it would invalidate a claim. We don’t keep them locked all the time unless away for a time, and don’t bother to lock them if we go out. They cannot be opened from the outside, so there really is no point in keeping them locked and hunting for a key every time we want a window open.

Profile photo of wavechange
Member

One of the insurance requirements I have seen says that if a home is unoccupied for more than 30 days:
“The water, gas and electricity supplies are turned off at the mains (and for the period of
November to March inclusive all water tanks, pipes and apparatus are drained) unless
required to operate an automatically operated central heating system used to maintain a
minimum temperature of 58F (15C) at all times.” (Towergate)

Fortunately I don’t go on holiday for a month in the winter months, but keeping the whole house at 15C deserves some justification.

Profile photo of Patrick Taylor
Member

What temperature would you suggest wavechange? Bearing in mind that most pipes etc are not in the main living areas but in the colder parts of a property.

Profile photo of wavechange
Member

I assume that the reason for requiring a minimum temperature is to avoid claims due to burst pipes. On that basis, perhaps the company should say that they will not entertain claims due to damage resulting from burst pipes during the winter months. The first priority for the householder is to turn off the water when they are away.

Prevention of freezing depends greatly on the design of the plumbing and heating systems and the amount of insulation. One of the problems introduced by improved loft insulation is that piping above the insulation is not warmed very much by heat rising from the room below. The advice used to be to ensure that there was no insulation under cold water tank in the roof space. If I was a plumber or heating engineer I would try to make sure that the piping is installed as far as possible under the insulation. There are so many variables and you are right in pointing out that it’s not the living areas that are the main problem. On a really cold, windy night I once had hot and cold water pipes freeze despite the fact that my kitchen was kept at 20C overnight. The pipes were embedded in an exposed north-facing wall of the kitchen and I knew that this room and a north-facing bathroom were at greatest risk. Fortunately, the pipes thawed without problem and it did not happen again.

Central heating pipes can be protected by leaving the heating on continuously and setting the thermostatic valves at the frost protection or other low setting or adding antifreeze that is compatible with the corrosion inhibitor in the system.

Profile photo of Patrick Taylor
Member

I am saddened that in the linked article we have headers such as
” Single parents could face penalties”

which I am sure could be joined with headers like
” Youngsters penalised in motor rates”
” Old people penalised for travel”
” People living in crime areas penalised”
” People penalised for claiming”
” People penalised for dangerous sports”
Sorry I should have added “could” to all the above.

P.S. Do you think there is anything faintly insulting to suggest some takes a three part quiz again immediately after they have read the three answers?

P.P.S. ” In our test, premiums increased by as much as 23% when insurers were told that the vehicle was locked in a garage overnight. Parking the car on the street was often the cheapest option for the driver.”
When it comes to money matters I like some precision and “often” does not cut it. Unlike the mass media Which? should be dealing in facts so if it is 10 times out of 98 say so. If it is 1 out of 10 then we can of course guess the survey size and reliability.

Profile photo of Chiara Cavaglieri
Member

Hello Patrick,

The premium research doesn’t cover whole-of-market – I was aiming to provide a (hopefully) useful snapshot of less obvious factors that affect your home/car insurance premium. I can tell you that in the example of where you park your car, the average saving when our fictional driver said he parked on the street, instead of a locked garage, was 7% (£43) using the comparison site. Approaching 5 insurers directly; Tesco and More Than dropped premiums by 13% and 11% respectively; Aviva added 1% (£3) for parking on the street; Direct Line and John Lewis charged the driver the same no matter where he parked.

In the article I also cover unexpected exclusions (car, home and travel insurance) – and this does cover whole-of-market, using Defqato data.

Hope this helps.

Profile photo of Patrick Taylor
Member

Thanks for the reply. I appreciate it.

I used to sell car insurance and renew it and it was always interesting how one could shape premiums depending on what you input or the description /job title., and which insurer favoured what profile. I was always keen to generate the best price … and then take into account loyalty bonuses from having other insurances with the same company.

I note you said “the Driver” and my reaction therefore is that the breaking into garages is sufficiently high in the area where he lives that apparently the street is safer. That may be contra but currently garaging cars is actually a requirement under some policies as the cars are attractive to thieves. Certainly my neighbours 4×4 is covered by that clause type.

However the concept of the article to point out apparent anomalies is good in that it is memorable. Unfortunately I am worried some people will take it as gospel that cars are safer in the street.

I believe it would help all members of the actual process was broken down and a lengthy piece written on the possibly 100 factors that will affect an individual quote for a car. And even why some cars are far cheaper than others to insure despite being class size similar.

Not every casual reader will want to delve now but I suspect at renewal or new car time many of the intelligent subscribers would like to get a feel as to the variables.

This is the kind of in depth article that would form a core part of a CAwiki offering to members.

Profile photo of Chiara Cavaglieri
Member

I like the idea of ‘100 factors that affect your car insurance’! Certainly one to consider for the future 🙂

Profile photo of Ian
Member

I must be one of the boring minority who does check their insurance details. We’ve only claimed a couple of times, and one was when my wife’s antique gold ring went missing while she was gardening (yes, I know, but…). I claimed for Loss on the Pru’s Contents policy and the initial response from the Pru was that because it went missing in the garden it wasn’t covered. By going through the policy wording with the Pru rep I was able to demonstrate that it was, in fact, covered according to their own words, a fact which they eventually conceded after referring it upwards. They also commented it was an ‘old’ policy and no longer offered. I suspect that’s where lot of issues arise.

To keep overheads down (and probably reduce fraudulent claims) companies continually move the goalposts to the extent where even their own staff are wrong-footed. We’ve now moved to the NFU, who don’t allow online comparisons or sign-ups and have a refreshingly relaxed approach to insurance in general.

Profile photo of Patrick Taylor
Member

Shouldn’t modern life require you to do “boring ” things like read the details of a contract covering thousands of pounds of your assets? !! : )

One of the things about using a physical broker would be you could ask them face to face what the terms meant. And because you were a valued customer they would reply.

At least you can argue that if you are confused the internet will probably provide the answer. Mind you it would be best from a reliable up to date source based in the UK with an interest in the matter ………. nope cannot think of anyone.

Member
Franjam says:
20 October 2016

Re. the comment that car insurance could be cheaper if car is parked overnight in street vs in garage.
Could Which take this up with The Insurance companies and if true asked for justification for this reasoning.

Profile photo of Chiara Cavaglieri
Member

Hello Franjam,
When I spoke to the industry about this, I was told that one of the ways insurers get an edge over each other is by assessing and pricing risk differently. So, they rate different things in different ways, as well as using their own claims data to decide whether particular customers may be more or less likely to make a claim – even if it seems counter-intuitive to us. I suppose the simple solution is to take the time to shop around and to pick up the phone to speak to insurers directly for a more personalised – and perhaps more sophisticated – approach.

Member
anne blackwood says:
21 October 2016

We are with LV. I had most of my valuable jewellry stolen last summer. – not much, but all of great sentimental value like my engagement ring and more…. There was no sign of a break-in because it was almost certainly stolen whilst a friend was staying to look after our dogs. She apparently had a friend to dinner several times and we are sure it was him – he had the motive we now know, and we can pinpoint the time with great accuracy. With our insurance policy, if a theft occurs whilst someone not connected with your immediate family is in charge of the house, then if there is no sign of a forced entry there is no cover. It is in the hands of the police, but it looks like they will not be able to charge him through lack of all except circumstantial evidence and no trace of the pieces. It feels like a professional job, because the jewellry was not obvious, and there would have had to be a bit more knowledge as to where to look. My friend is not suspected, but it has brought it home to us that having someone else in charge of your home even when you have known them for a long time and trust them implicitly carries its own risks.

Profile photo of Chiara Cavaglieri
Member

Hello Anne,

So sorry to hear that. It’s not unusual for an insurer to insist on evidence of a ‘violent or forced’ break-in before paying out for this type of claim. But, the Ombudsman says this should be made clear at the point of sale .
It’s also important to check any changes to cover at renewal – we’ve heard from Which? members who had claims turned down because their insurer altered terms and conditions from one year to the next.
You would hope that insurers make any changes to cover crystal clear when they send out renewal letters, but it seems that isn’t always the case (see https://www.theguardian.com/money/2016/may/14/burglar-alarm-home-insurance-policy-lv ) .