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Home insurance is a necessity for home owners to protect the structures and/or the belongings of those within the home itself. Home insurance works by replacing or paying the policy holder when that which is insured becomes injured, destroyed, lost, or stolen and the policy holder is in good standings with the home insurance provider. As one can imagine, having home insurance is an important part of owning a home, and having the right insurance company is an important part of possessing home insurance. Insurance companies absolutely get excited and thoroughly enjoy obtaining new customers – regardless of the cost. And you are the lucky customer insurance companies will vie for at almost any cost. Knowing this before you go browsing and eventually purchasing a home insurance policy will help you feel a little less intimidated by the highly knowledgeable insurance agent wanting to overwhelm and impress you with numbers and facts that mean just about nothing to the layman. No matter what the insurance agent says, your satisfaction is the number one goal. One tactic home insurance companies use to get new customers is to offer incentives to new customers. This can be a benefit to you since you just happen to be the customer. Choosing an insurance policy and insurance company based on the incentives may not be a good idea, but if it comes down to a tie, a nice incentive may just sweeten the pot for one side. Incentive gifts range in size, value, and obligation. Before accepting an incentive, be sure you know what you are getting into; before expecting an incentive, be sure you know what your responsibilities are to obtain the incentive. Questions to ask before accepting an incentive: - Is there a hidden fee such as delivery fee?
Believe it or not, some incentives are mailed to you. If this is the case, knowing who is paying the delivery fee is important. If there is a delivery fee, do you feel it is fair? - Is the incentive taxable?
Many incentives may be taxable. Are you willing to pay the tax on the incentive? If this is a concern, consider your options carefully. - How long do you have to agree to stay with the insurance provider before you can obtain the incentive?
Getting and incentive that means you agree to stay with a home insurance company for a decade may not be in your best interest no matter what the incentive actually is. Weigh the value of the incentive carefully. - What happens if you do not keep your end of the bargain?
If you do not stay with the home insurance company for a specific, preset amount of time, usually you will be charged for that incentive. What does the home insurance company believe the value of the incentive actually is? If you are not told up front the value, you may ask for the value of the incentive before purchasing. - Is the amount of money you pay for the policy decreased if you refuse the incentive?
If the policy fee decreases upon refusal of the incentive, you should definitely find a different home insurance agent. This is not something that should affect your premiums. One of the most popular types of insurance incentive saves you money each time you pay for your insurance. Companies such as Lloyds Insurance, Endsleigh Insurance, Barclays Insurance, and More Than Insurance offer a sizable discount if you have both a car insurance policy and home insurance policy with the same company. This is a great incentive because you are not going to have any issues with accepting the incentive given by the insurance company. Remember, always check the incentives and the bottom line; read the fine print carefully. Buying your home insurance from More Than means you can take advantage of their 25% discount off online purchases – as noted above they also offer an extra discount as an incentive to buy buildings and contents insurance in the same transaction. Lloyd’s insurance offer a 10% discount for online purchase, and they claim savings of up to £450 when switching to them. Naturally the examples they use to make this comparison are carefully selected to make the differences appear as large as possible, but nonetheless if achieved a saving of £450 would make the effort of switching less painful. In a similar vein Endsleigh claim that up to £136 can be saved by switching to them. They also claim that their quote process takes less than a minute, so it really can’t hurt to try them out. Barclays insurance are confident in their products – so much so that if they can’t beat your renewal quote they promise to refund the difference up to £100, and give you £50 when you sign up. If you buy online then there is a 10% discount on the policy price. There are many reputable insurance companies offering home insurance coverage. These companies offer free, no obligation quotes, and most have a presence on the Internet. If you are looking for incentives offered by home insurance companies, consider the policy benefits, the reputation of the insurance company, and the cost to you before accepting any incentives. Always, and I mean always, read the fine print. Never sign or agree to anything without first reading the contract. If there is a question, please contact a financial advisor or attorney to assist you in making the right decision.
Staff editor, Insurance Section, June 2007 |
