Is it Worth Claiming on Home Insurance?

Eventually I got through the home insurance company’s maze of security questions and disclaimer announcements.

Could you explain why our home insurance renewal is 28% more expensive than last year? And 50% more expensive than 2 years ago?

The agent offered a list of possible reasons.

Is it more likely that it’s because we made a claim in 2020?

The Insurance Claim

One stormy weekend in 2020, driving rain made its way through the seal on the patio doors and onto our laminate floor.

By the time we spotted it, the gathering pool of rainwater had gone beneath the boards, soaking into the thick underlay. 

My best efforts to lever up the floor to help it dry proved fruitless. The rainwater had spread across the underlay like a sponge.

I looked at my wife.

Well, I guess that’s what home insurance is for. No point having it if we never use it.

So we rang the insurance company.

They sent a contractor. He pulled up the floor and plugged in a couple of dehumidifiers.

Turn up the TV, please. I can’t hear it over this noise!

But life went on – and so did the noise of the dehumidifier motors – until the contractor was satisfied that the surrounding woodwork was sufficiently dry – a week or two later.

The Insurance Settlement Offers

A chap from the insurance company rang with three choices for us…

1. “We can arrange to fit the new floor. Err… but COVID restrictions means it’s likely to take several months… or years.”
2. “You can get several quotes and submit them to us. Good luck with that with COVID restrictions.”
3. “We can pay you, and you can arrange your own repair.”

It was pretty clear that option 3 was his preferred choice. Less work for him. And much cheaper for the insurance company, as we were to find out when we later priced things up and found it wouldn’t cover the cost of everything. 

Insurance Price Hike After the Claim

The following year, 2021, the insurance premium increased. As usual, we rang them to negotiate, but there wasn’t much movement.

In 2022, it went up again. 

In 2023, even more. 

Our 2024 home insurance renewal dropped through the letterbox this morning. 

50% increase over two years. Ouch!

They had to be kidding. 

The Penalty of a Home Insurance Claim

So I got two quotes from another insurance company.

Online. Similar policy. Same excess.

• Quote 1: I included the 2020 claim details.
  
• Quote 2: I excluded it.

The first quote was £548.

That’s still £43 cheaper than our own insurance company’s £591. 

But check out quote 2…

It was £435.

Yep. £113 (26%) more expensive because we’d claimed on our insurance four years ago. 

Compromise

So I rang our own insurance company again.

They managed to give us a small discount. 

Then we increased the excess and tweaked a few things.

And we settled on a £527 renewal.

That’s still much more than it ought to be. 

But I guess they do want their money back! 

Home Insurance Claims Lessons Learned

Over 37 years, we’ve made a mere 2 home insurance claims. On both occasions, the insurance companies were diabolical. 

So what have I learned?

1. Only ever claim if it’s a massively expensive problem you can’t fix yourself. It’ll cost you more than the claim’s worth.
2. What’s the point of premium policies that promise everything such as accidental breakages on things like mirrors? If you claim for a £300 broken mirror, you’ll pay back four times that over the following years.
3. Forget that £300 mirror claim anyway if your excess is £300.
4. If you’re only going to submit big expensive claims, you might as well increase the excess to reduce the premium. 
5. Always ring your home insurance company every year to negotiate the renewal price.
6. Many home insurance companies ask if you’ve had a claim in the past 5 years. So, after 5 years, when you no longer need to declare “spent” claims, it’s worth getting quotes from other companies. You don’t have to move insurers; tell your current home insurer how cheap it is with their competitor. They might reduce their premium.
7. Unlike car insurance, don’t move home insurance companies unless the price saving is significant. If a problem began before your new insurance began, it might be very difficult to get paid out. 
8. Maybe basic is best. It’s cheaper. But never be under-insured. 

Hey, they’re only my own lessons learned. They aren’t recommendations or advice. But I hope they’re helpful. 

Do you have any more to add to the list? Please pop them into the comments box a bit further down the page.

Is it worth making a claim on your home insurance? The premium will likely increase if you do. Here are some useful lessons about home insurance renewals after making a claim. #insurance #HomeInsurance Click To Tweet