Why Price Isn’t Always King

In this exclusive column, Source Insurance Sales Director Carl Oakes explores why price isn't always king with a focus on quality products.

If one thing is for certain: everybody is feeling the impact of the cost-of-living crisis. The Home Insurance market is no different—in 2023 alone, home insurance prices rose by an average of 40%, with many customers experiencing prices north of these averages. However, 2024, so far, is shaping up to be a better year for customers, regardless of continued price rises.

This continued challenge is exacerbated by insurers’ withdrawal from certain geographical areas or even from the market altogether—most notably by RSA. Consolidation has also played its part. The result for the consumer is a reduction in choice, higher prices, and, in some extreme cases, an inability to obtain suitable insurance.

We all know that customers often see insurance as a necessary, grudge purchase, frequently leading to purchasing decisions solely driven by price. In the current climate, this is even more evident. After all, price is king, isn’t it?

However, this almost ingrained view of trying to get the lowest price, reinforced over many years by the constant marketing of aggregators and the relentless pursuit of toys, free pizza, and cheaper cinema tickets, has pushed consumers to purchase insurance without thinking about why they needed it in the first place. It exposes them to the risk of underinsurance, unsuitable products, and an inability to claim when the worst happens.

Have you experienced the emotional and physical impact of a flooded home? The total loss of all your possessions due to a fire? Or that horrible feeling of knowing that somebody has broken into your home and invaded your privacy? Equally, how many of us have thought ourselves accomplished weekend DIY enthusiasts and managed to put a nail through a pipe accidentally (I know I have!), spill paint on a carpet, drop a hammer in a bath or complete a plumbing job only to find to water coming through the ceiling a few days later.

These are the reasons why customers need home insurance, but they also need your help to purchase the right cover. Ask yourself: Did the customer specify their personal possessions correctly? Did they adequately account for all of their contents? Are they covered for contractors locating the source of problems? Did they elect to take extended accidental damage coverage or cover for emergencies when they arise?   

In many cases, the answer for most customers is no, they didn’t. In their relentless focus on obtaining the cheapest price, many set aside, or don’t think about, the quality of the product and whether it will pay out in full at that critical moment.

That’s where the benefit of advice is critically important. Backed up by a quick and easy quote and buy process, a choice of insurers, and the ability to cover all the necessary eventualities with a quality product, Source Insurance has delivered these tools to our partners for over 30 years alongside an excellent 5* Trustpilot rating for service.

With the launch of our new 5* Defaqto-rated Source Home product and now with an even faster, more intuitive quote and buy, advisers are ideally placed to help their customers purchase the most suitable cover.  

Home insurance costs have risen, but so have the costs to replace your customers’ most precious things. Would your customer really want to compromise on their replacement? So, in short, price isn’t always king.

To discuss more about Source Home and the rest of our proposition, give us a call at 02920 265 265. Alternatively, follow us on LinkedIn to stay up-to-date with our latest news.