The Value of Advice vs Comparison Sites

76% of homes in the UK are underinsured and 20% are overinsured, meaning just 4% of the country have adequate Home Insurance that covers their needs exactly. These figures are according to Rebuildcostassessment.com.

It’s no secret that value and advice are aspects of protection that can’t be replicated with price comparison sites. Consumers who lack industry knowledge may be purchasing inaccurate quotes that crucial advice from industry experts could help them to avoid.

With over 95% of the country needing quality advice to avoid inaccuracy in Home Insurance protection, it’s up to you to seize the opportunity with both hands.

Consumer Behaviour

According to Property Claims Loss Assessors, 64% of consumers prefer to shop around before renewing their current policy, showing a behaviour that’s price-centric, opting to compare products before committing to a decision.

When shopping around, 37% of consumers found product offerings from alternative providers attractive, especially when purchasing online.

Loyalty has become a secondary priority for many homeowners, preferring to centre around price and value for money.

However, if consumers aren’t using an adviser to help them finalise product purchases, they can often leave themselves with an inaccurate policy without even knowing.

Misconceptions Around General Insurance

Which.com have recently revealed findings that has an impact on the way advisers provide services.

According to the industry experts, consumers don’t fully understand limits of Home Insurance policies, making mistakes when purchasing.

From their survey, 40/85 answers given to claims scenarios were incorrect. Every participant to this survey made at least one incorrect assumption. This shows a clear opportunity for you to add value to your clients’ experiences, helping them to fill in the gaps of limited knowledge.

This data also showed 31% of participants thought they insurance would cover them for anything that wasn’t their fault, with 25% claiming they didn’t know. Additionally, 29% of contributors thought their possessions cover protected them against anything that happened to said possessions. This, of course, isn’t the case.

Home Insurance Case Study

The Financial Ombudsman Service has showed an insightful example of misconceptions in practice. The full investigation can be found attached.

According to The FOS’ Joe Thornley – an Ombudsman:

“Mr. F holds a home insurance policy with his insurer. When he noticed damage to the flooring in his home, he made an escape of water claim to his insurer.

The insurer inspected the damage and identified rot, but it couldn’t identify the source of the damage. It said because rot was excluded from cover, it was declining Mr. F’s claim. It also thought the damage had been caused over a sustained period of time – another thing his policy didn’t cover him for.

Mr. F wasn’t happy with this and complained. His insurer didn’t change its stance, so he brought his complaint here.

Initially one of our Investigators didn’t recommend Mr. F’s complaint be upheld, they thought his insurer’s decline was fair and in line with the policy terms.”

Ultimately, Mr. F’s claim wasn’t upheld, and his insurer was found by the FOS to have acted fairly in the way they handled the situation. However, it’s more than likely that Mr. F would have been disappointed with the outcome.

How to Provide Value and Avoid Similar Incidents

Misconceptions and underinsurance are driven by price-focused decisions, where consumers may not be considering all factors needed when purchasing an accurate policy.

These obstacles are symptoms of a market where consumers choose to navigate complex policies without the guidance of an industry expert. That’s where you come in.

You can translate policy wording for your clients, asking the right questions to identify gaps in cover. From here, you can make tailored recommendations fit around the unique needs of your clients.

Here are a few areas you can touch on to add value to your conversations – setting you apart from price comparison sites.

Clarify Common Exclusions and Limits

Rot, gradual wear and tear, and policy excesses are all areas where homeowners may fall short of their expectations. Explaining exclusions helps to prevent future frustration, especially when a client expects a claim to be withheld. You can help to avoid these situations altogether.

You can also access case studies such as the one we’ve highlighted to add context to your client’s experience, avoiding a ‘it would never happen to me’ incident from occurring.

Compare Cover, Not Just Price

As an adviser, you understand that there is a balance between quality of cover and a cheaper price for a product. Consumers may lean too far into one way or the other, so you can help guide them. Additionally, a consumer may not understand all the ins and outs of their potential product, so they may think they’ve got a good deal, when the reality is their cover isn’t accurate. You can emphasise the impact of quality protection without going over budget.

Offer a Policy Review at Renewal

You can add extra value to your client experiences by reigniting conversations before their renewal. Want to make a lasting impression? This can help to differ between a good one-off interaction with a client and creating a professional relationship that can last years, enhancing your back book.

If you want to collaborate with us on how to implement value into your conversations, adding irreplaceable advice to your clients’ experiences, give our Business Relationship Management team a call, where they can give you added confidence when offering ancillary products like Home Insurance.

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