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home insurance

An awful lot of people in Britain have never really made a decision over where to buy their home insurance from; they have accepted the advice from their building society or other mortgage lender and signed up with the recommended company, and they have stayed with them ever since, renewing their policies automatically every time that they fall due in blissful belief that because they are well established customers they are automatically getting the best possible rate. How wrong they are.

Insurance companies very rarely make a profit on the first year's cover for any customer because there are usually quite considerable costs in attracting that customer in the first place; not only do they usually have to spend large sums on advertising but fat fees have to be paid out to intermediaries such as insurance brokers as well, and these fees can often be as much as a third of the total premium. These companies love to have a customer who stays with them year after year after year, because all these years are profitable but there is quite a lot of client turnover in the insurance industry as people move home, find their circumstances changed, find a better offer or even die so there is a constant necessity to keep on finding new clients. How do they do that? Simple, they use financial incentives to persuade people to leave their existing insurers and sign up with them. And who pays for these incentives in the end, you may ask? It is the unsuspecting regular customer who stumps up the full premium every year without complaining.

So, how can you benefit from this situation? You have to be a lot more hardheaded and accept the fact that you can save a very great deal of money indeed by forgetting about being loyal to one company, when there are others around that can offer you the same benefit at, very often, a much lower premium; at least for the first year. If you shop around on the Internet you will find that there are many home insurance companies which will offer you a substantial discount off their normal charges if you switch to one of their policies; 10% is easy to find, 25% is still available and occasionally you could find discounts as high as 50% off the normal annual premium. You do have to bear in mind of course that when renewal time comes round you will be expected to stump up the full price for your policy but there is no law which says you have to renew with the same company once the policy has expired so you can simply go online and look for the best offer again. Is it really worth your while to do this? Well, searching for the best offer should not take you any more than half an hour or so and when you have received a quotation which you find acceptable it is usually an easy matter to pay online by credit card and your policy documents normally arrive by post within a few days. When the savings that you make can run into hundreds of pounds that half an hour that you have spent in front of the computer could prove very, very profitable indeed!

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