The importance of annually reviewing your insurances
I recently reviewed my 80 year old mother’s buildings and contents insurance for her £350K semi-detached 3 bedroom house in a town in Essex. I was shocked to find that she had a buildings insurance policy with Santander for which she was paying an annual premium of £700 and a contents insurance policy with Prudential with an annual premium of £300.
My mother has been a customer of these companies all of her adult life yet she has been repaid for this loyalty by being totally exploited. A quick search on moneysupermarket.com threw up some combined buildings and contents insurance policies substantially cheaper and with much better cover. I was able to get her a policy 73% cheaper and sorted it all out online!
To make matters worse she has money saved in various Santander bank accounts which are paying her on average less than 1% interest a year. This is a woman who has only ever claimed once in her life on a buildings and contents insurance policy!
This is a really shameful way to treat an OAP. However, it is symptomatic of the way large businesses ruthlessly exploit the ignorance of their lifelong loyal older customers.
My fiancee and I reviewed our buildings and contents insurance policies last weekend. She saved 25% and I saved more than 40%. This was the first time we had reviewed our policies for just 2 years. In both cases we improved the quality of our cover too.
So the moral of these tales is that you need to review your buildings and contents insurance policies annually. In fact you should review all of your insurances annually.
It goes without saying that you should have a review with your financial planner annually too. In my experience the value of these reviews is significant in relation to the small investment of your time. You know it makes sense.