The $100 magic question - Insurance rates

[Andrew_A]

Thought I would share a magic question that works surprisingly well with insurers and the premium you pay.

Just ask 'How can I reduce my premium?' and wait....

You will find that there are plenty of variables you can adjust that won't affect the level of cover you are seeking to achieve and that will reduce your premium. Also even if you don't change a single setting this magic question is guaranteed to surprise you with positive results if you ask it often enough

Latest example was for a property in Brisbane I insured this month. The premium had risen 29% (thanks to 2011 QLD weather) even though there were no claims, I asked the question and received a $40 discount off the premium even without changing anything. An impressive hourly rate, less than $100 in total but then again I ask this question every year for all insured products and have often received hundreds of dollars in reductions!

 

[Angel]

Yes, do it.

Last month I phoned our building and contents cover (for our PPOR) and asked them if our Over 50's discount had been applied? No, and a week later we received a cheque in the mail for about $120.

 

[wobbycarly]

Rang RACV yesterday, and although we cannot 'opt out' of the new flood cover, I increased the excess to our normal rate amount of $500 (from $300) and saved nearly $50.

 

[Andrew_A]

The question still works well, just reduced an IP policy by $55 after 15 minutes on the phone, exactly the same policy just with a reduced price.

 

[sashatheman]

I just managed to reduce our home and contents insurance by $50 because I threatened to change providers when the insurance ran out (this month). I did a quote with another company and they were cheaper, so i told them, and they matched it.

 

[Andrew_A]

Latest time I tried the magic question was yesterday for a policy renewal, a five minute phone call and the premium was reduced by $50.

 

[AdamW]

Hi,

I am shopping around for quotes on an investment propety I own In Townsville after my current insurer increaed the premium by 65% for the coming year.

One thing I am starting to question is the notion of insuring for replacement / re-build value. Are we really over-insuring ourselves and paying higher premiums than we need?

In my case the property cost me around $375K and the land valuation is about $225K. So the house itself was worth (and still is) around $150K. Yet several insurance companies that I have spoken to have suggested that I should be insuring for $300k or even $330K. Now, that may well be the cost to re-build a similar sized house, but I will end up with something far superior to the 50 year old house I currently own.

Wouldn't I be wiser - in these times of spiralling insurance costs - to just cover the "break-even" amount (ie whichever is greater out of the price I paid for the house or it's current value) - in this case around $150K? As even if the house was destroyed I'd still have my block of land worth $225K. And an insurance payout of $150K would mean I do not suffer any financial loss.

From where I'm looking, insuring a $150K house for $330K will only result in one winner 99 years out of a hundred - that being the insurance company that takes the premiums. If some catastrophe hits my house I wil actually end up far better off, but these events are pretty rare so surely it is totally over the top to insure for so much?

Does anyone have any thoughts on this?

Cheers,
AdamW

 

[Erica]

Check the small print on your mortgage documents, usually a stipulated minimum amount of insurance for building replacement will be required or you will be in breach of contract with lender.

If you have no mortgage over property no worries.

 

[Pa1nter]

My home and contents was due this week with an amount of $1738 with suncorp.

I rang them and discussed reducing the amount,and ended up saving over $450, new amount $1280

What I did to get that huge amount off

1: I dropped my house from $463K to $436K

2:I dropped my Contents from $82K to $50K

3:I upped my standard excess from $500 to $1000 and dropped my contents excess from $500 to $300(More likely to make a claim here)

4:I cancelled my accidental damage on home and replaced it with Motor burnout as we have 5 a/cs (Still have accidental damage on contents)

I also had my RACQ insurances due $2000 and made a call and reduced that to $1800.(This is for 3 vehicles and caravan),just took the windscreen excess off and increased one vehicles excess.

 

[wylie]

Pa1nter, your phone call mirrors my own with Suncorp. My premium went from about $1200 to close to $1700 (from memory 36% increase). I reduced it back down to about $1200 doing just what you have done, and then I called Youi and got the same insurance for about $970. There is no flood cover, but if we ever flood, things will be pretty bad for most of Brisbane.

We lost our carpets through "overland flow" last year. Suncorp took about seven months to tell us we were not covered as it was not flood. It was one of the big "wets" where lots of insurance payouts were required, so not just a regular bit of rain. We are on a hill, so this is the biggest risk for us. So we went with Youi and saved even more.

My hubby's sister and husband had hail damage recently and Youi has been marvellous in looking after them, so I'm confident.

 

[Pa1nter]

We lost our carpets through "overland flow" last year. Suncorp took about seven months to tell us we were not covered as it was not flood.

I rang Suncorp and queried them on why you were not covered as this is a worry for me as the only flooding we could get where we live is Overland flooding,they assured me I was covered and the only stipulation is that the flooding occurs within three days of the initial event??

I then asked him how long did it take for the rain to reach Brisbane and he said 2 days and couldn't answer as to why you weren't covered.
Is there some other reason they gave you ???

 

[wylie]

No other reason. I'm not sure they called it "overland flow" or if that is a term I have just picked up. Our house is cut into the hill at the back and one side and with the really heavy rain we had back in February (when lots of places suffered from water damage) our yard got so waterlogged that I thought our slab may have cracked.

I thought the water was coming up through the slab due to a cracking incident because we have never had this issue before (except once 14 years ago before we put in the drainage that has worked well for 14 years).

The engineer they sent said it was not the case, and that the water seemed to have come under the timber wall from the sheer volume that was flowing past the wall. We have drainage behind and beside the house which copes well, but this was a "big wet" and there was so much water flowing down the side that this may have been the case.

 

[Curlytops]

I have found when ever I get an insurance policy renewal I just ring up and tell them not happy with the price and I can usually get it to what it was the previous year or very close or sometimes even cheaper.

You can also use a broker which I do for IP's and I though I would try for my own quote thru the same company and the broker got $200+ cheaper than I could.

I dont believe you should up the excess by $500 to save $50 especially if you have to claim and with IP's it is usually the case.

Cheers

 

[geoffw]

I live in a bushfire prone area. I will be looking at my insurance cover with a view to possibly increasing the cover. The cover has been automatically increased over the years but I don't know that it will be enough.

 

[Curlytops]

They automatically increase it every year and this is something to look at do you need that much usually if you drop it back to what it was this is a reduction in the annual cost as well.

 

[annmak]

The magic question failed

My insurance premium increased by 25% this year. I rang up Westpac insurance and discussed with them for over half an hour but in vain. Even when I suggested to reduce the insurance amount back to that of last year which is 15k less, they only offer me a $5 reduction in premium.

Can anybody suggest a good insurance company for Melbourne properties?

 

[wylie]

Give Youi a try. I've switched to them. Also recommended in another thread was Woolworths (I think).

 

[Curlytops]

You can also try going straight thru to cancellations and see what they can do but definately shop around. if you would like the number of my broker he may be able to help you as well. Let me know and I will pm you.

 

[Angel]

Can I mention Health Insurance?

After some run around, Hubby thinks I do nothing all day, I got switched through to the lady at Bupa whose job is to ask me why I wanted to transfer to a different company.

She then offered us a product that the girl in their local office didn't tell me about. We now have a superior cover for the same price as the old one and I might be able to wrangle the new Cpap (bought in December) without it affecting our limits for 2013. The rebates and limits are way better than the old product.

The bad news is that I have had two companies both debiting premiums from my bank account since November and neither wants to give me a refund.

 

[emptyvessel]

Suncorp insisted on manadatory high rebuild value

Switched PPOR from Suncorp because they insisted on a mandatory building cover increase from $275k to $405k. Which is ridiculous because I built my house 3 years ago and I have the building contract. Even with improvements and inflation, we are looking at $300k maximum. Located in Brisbane, not touched by any floods and not even impacted by Moreton Bay Regional Council 1 in 1000 year flood projections. Suncorp told me that the process to contest this valuation involved sending them a copy of a formal valuation completed in the last 12 months. I didn't have one and I wasn't going to spend a few hundred bucks just to find out. And sure wasn't going to waste my time.

Oh, and my premiums have increased 55% in 2 years. No claims, no floods, nothing.

Cheaper to switch insurance companies. So I called my broker and called St George. Both insurers couldn't believe that Suncorp was enforcing values, they were at pains to tell me that I could pick my own. CGU and St G had the best overall policies, terms and premiums. So went with one of them and saved myself $600 this year.

My mortgage broker told me that they use the insurance calculator here to work this rebuild cost out; http://www.insurancecouncil.com.au/for-consumers/types-of-insurance/home-contents. Sure enough, I plugged my house in and I got around $405k. Man, if I spent $405k on my house, I would have the Taj Mahal. And I don't.

It's called gouging. Now Suncorp will lose both my cars and one of my IP's. I will switch just on principle because I was not treated as the valuable customer that I am. Silly Suncorp.