Contents Insurance? Do Premiums Ever Fall? Factors Affecting It?

LMsattar on 04/05/2016 - 13:11
Last edited 04/05/2016 - 13:58 by 1 other user

Hi everyone, I need some advice on Contents Insurance and how it works. I've had my Contents Insurance for almost 2 years now, and last month my iPhone screen cracked. There were few more issues with the phone, for which I was given a replacement phone for $450 at the Apple store.

I was told that I can claim that from my insurance company, who actually are happy to do so for me and all I have to do is pay them a $100 access fee and I will get back that $450 from them. But I don't understand why my insurance company (RAC) is so keen and 2 step ahead of me in paying me back the claim?

They have been calling me regularly for the receipt so they can process the claim, also at one point the lady on the phone said that they can even waive off the $100 access if I claim it, which obviously ring bells and sounds fishy. Now I understand that whatever I claim will actually be added in my premium for the years to come. I want to understand that is it actually the NUMBER of claims that matter, or the AMOUNT I claim that matters more, in deciding the premium and how much will that be affected?

Is it a good idea to claim the $450, which although is a good amount for an Oz-bargainer (I've joined today but I have been following the site for more than 2 years now and its awesome), but still not something huge for which you keep paying like forever in premiums.

Do the premiums ever come down, for example if you don't make a claim in a year or more?

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  tomsco on 04/05/2016 - 13:23

  Interested in this one.

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  mskeggs on 04/05/2016 - 13:27

  +4

  I haven't claimed for almost 20 years, and my premiums have only ever gone up.
  The eagerness to get your claim is a surprise, but I suppose it you have paid the extra premium to get handset coverage, or chosen a more costly insurer that includes that as standard, they may be keen to serve you well in the hope you keep your business with them.

  I only hold insurance for catastrophes, so my excess is the highest it can be and get a meaningful premium discount.
  If you make a claim, you will have to supply those details to insurers for years to come.
  Why not try a couple of online quote tools to see the difference in premium with or without disclosing a claim.
  If it is $150 more p.a. for the premium I would be reluctant to make the claim.

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    mskeggs on 04/05/2016 - 13:42

    So I just did a test quote on GIO, and they didn't ask about past claims. Might be worth trying a few others to see if that is common.

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  StewBalls on 04/05/2016 - 13:34

  +1

  Yeah, the only way I've been able to mitigate the premium creep is by yearly shopping around for policies & then either switching or price matching the current insurer…other than that, sadly IME the only way is up, baby! ;)

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  lupiter on 04/05/2016 - 13:44

  My premium has only ever dropped when I moved house (I added a bunch of specified contents at the same time and it still went down, crazy). Each year it tends to go up a bit (inflation yay) but not heaps (not like health insurance, oh joy).

  If you have made a claim it is likely to increase your premium, but probably not by much, unlike say an at-fault accident for car insurance. Still, get some quotes together and add it up.

  I believe that the phone calls are because they're trying to be helpful. Strange, I know, but sometimes it happens.

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  [Deactivated] on 04/05/2016 - 14:08

  +2

  When we claimed on our home insurance for storm damage we lost our 'no claims discount' for a few years…so basically they put your premiums up for a few years to recoup the cost. This was with Westpac. We took our business elsewhere as they just kept jumping the base premiums up each year anyway, even after 5 years of no claims. Now with OnePath (ANZ) who gave a great initial quote but jacked the price up the following year by a hefty amount (no claims), it remains to be seen if they do the same this year.

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  [Deactivated] on 04/05/2016 - 19:02

  +1

  Did you shop around for your current policy? Since there's quite a few players on the market (in particular coles and woolworths) you might be able to find a better premium. Anyways the only way to find out it to do a few quotes saying you've made a claim. I doubt you will see a massive price hike in your premium, if it all.

  I made a claim once for $4000, i never got a shock increase. The only time was after the floods in QLD (in which i didn't make a claim) and i switched to woolworths and pay close to my premium i've paid for quite a number of years.

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  naritas on 04/05/2016 - 19:19

  +1

  Your claims history can definitely impact upon your future premium costs. The reason why many insurers don't ask is because there are large pools of claims info that is shared between insurers (an example here). So, in short, they don't always need to ask to know about your claims history. If you were to err on the side of caution by treating insurance like Mskeggs is (high excess/lowest premium - structured for big emergencies and minimal claims) you'll probably optimise your chances of keeping your premiums low.

  Hope this helps

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    SirFlibbled on 05/05/2016 - 16:02

    Your claims history wont impact on your premium, but they will impact on whether they might offer you insurance which is why they don't ask about them when quoting. But when you go to get the coverage, if you (for example) disclose you've made 10 claims in the last 2 years, the insurer may decide that you're too risky and refuse coverage.

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  user27 on 05/05/2016 - 01:57

  +1

  Definitely pays to shop around, loyalty doesn't exist in insurance. Some companies like SGIO in WA offer incentives for you to compare with then but it doesn't mean that they are necessarily cheaper (see http://www.perthhacks.com/2016/04/why-you-should-compare-sgi…)