According to those who monitor buildings and contents insurance premiums for a living, the days of double-digit price hikes are over. Hallelujah, I hear you say.
Data analysts at the august Association Of British Insurers calculate that the average cost of annual cover currently works out at around £393, which is 7 per cent higher than a year ago.
Yet averages – prices and increases – can be deceiving, as John and Sue Miller have recently found out when their home insurance came up for renewal.
The Millers, who live in a three-bedroom detached house in Kingswinford, Dudley, were told by Saga that their premium for a new three-year fixed-rate deal would be jumping from £391 to a tad over £1,011, an increase of 158 per cent.
John, a former executive with local building society Tipton & Coseley, who now volunteers in the ticket office at Severn Valley Railway in Kidderminster, was flabbergasted. As a result, he sought reasons for the increase.
Although a claim for a small water leak was made (and paid) in 2023, the 70-year-old knew this wasn’t the main reason for the mind-boggling price hike.
All change: John Miller on the platform at Severn Valley Railway in Kidderminster, where he volunteers
Given the scale of the increase, John wasn’t surprised when Saga said there was room to negotiate. By offering a one-off ‘discount’ of £125 and getting John to pay a slightly higher excess in the event of making a future claim, it reduced the renewal price to £801. Still an increase of 105 per cent.
It also said that if the Millers were happy to renew for just one year – as opposed to three – and accept a slightly lower level of cover, it was prepared to offer a premium of £591. An increase of ‘just’ 51 per cent.
‘We’ve been loyal customers of Saga since 2019,’ says John. ‘We have stayed with them even when we could have shopped around and got cheaper cover elsewhere. But this time we felt it was taking the proverbial biscuit.’
John and Sue used comparison website Go Compare to find cover with the AA. For its most deluxe cover (platinum) the premium was £494, a more acceptable increase of 26 per cent.
There are two conclusions that can be drawn from the Millers’ insurance saga (apologies for the pun). First, despite rules that now require insurers to treat new and existing customers on equal terms, it’s obvious they are not being applied vigorously enough.
By offering existing customers who kick up a fuss a discount, insurers (not just Saga) have created a two-tier pricing system where non-complaining loyal customers get a poorer deal than those like John and Sue. That isn’t fair.
Secondly, as the Millers discovered, there is only one way to keep big premium increases at bay – and that is to shop around. ‘I’m afraid that customer loyalty only goes so far,’ John told me.
Yes, but I think he is being far too polite. In his shoes, I would be steaming mad (apologies for the second pun).
Sadly, when it comes to car and home insurance, customer loyalty still counts for zilch.
So my message to you is simple. If insurers treat you with contempt at renewal, take your custom elsewhere.
It’s easy-peasy and could save you a small fortune in these rather straitened times.
Banks are helping to kill off our small towns
The way things are going, customers of the big banks will soon have to live in – or close to – a city centre in order to obtain five-day-a-week access to high-street banking services.
While most city centres are currently awash with banks, branches are being routinely axed in many towns up and down the country. A banking feast as far as city dwellers and workers are concerned – but the equivalent of a famine in many towns.
This point was drilled home last week when readers updated me on the banking health of their respective high streets.
First, from the glorious city centre of Chester in Cheshire, local Richard Chamberlain was thrilled to report the opening of a new Metro Bank (the bank’s 76th branch).
‘It makes a refreshing change from endless branch closures,’ Richard told me. The branch, which will be open six days a week, joins Lloyds, Nationwide, the Post Office and Santander on the city’s Foregate Street.
Barclays, Cooperative, Handelsbanken, Halifax and HSBC also have a presence in the city.
In contrast, reader Geraldine Davis is finding it increasingly difficult to access banking services in her home town of Margate in Kent.
A long-standing Barclays customer, 80-year-old Geraldine has seen the bank close its local branch – as well as nearby branches in Deal, Herne Bay and Ramsgate.
‘The nearest Barclays is now 15 miles away in Canterbury,’ she says. ‘I’m disabled and have no car, so it’s a no go.’ After her debit card was recently swallowed up by an ATM, she was temporarily left with no way of accessing cash.
With the ‘local’ Barclays hub in Margate not offering any cash services (like all
hubs operated by the bank), she was only able to get money by cashing a cheque at her local pub.
‘It’s not good enough,’ she told me last week. I agree. The banks are playing their part in destroying our towns’ high streets.
Let’s bury the funeral fraudsters
The regulation of funeral plan providers has been in force for three years, but the sector continues to suffer from the fallout caused by the collapse of Safe Hands.
Last week, administrator FRP Advisory Trading informed the company’s customers that they would be receiving an ‘interim dividend’ by no later than November 28 this year.
A wee bit of welcome news for those caught up in the scandal – 46,000 at the time of the collapse. And when
I say a scandal, I mean an almighty one involving the misuse and misappropriation of money held in a trust fund for the sole purpose of meeting the cost of customers’ future funerals.
The Serious Fraud Office continues to look into what went on at Safe Hands after launching a criminal investigation on the grounds of suspected fraud in 2023.
Sadly, customers should not hold out hope of seeing a big chunk of their investments returned. Three months ago, FRP indicated the expected return to planholders would be between a paltry 8p and 13p in the pound.
Maybe the best customers can hope for is that those responsible for driving Safe Hands into the ground will be held to account. I hope so.
