Paying too much for your insurance?

We are all getting used to huge discounts off just about anything - hardly anyone pays full price now for electrical goods, CDs, books, and just about every other product or service. Insurance, whether it's for your home, car, life or even pet tarantula is now available online at a discount. Check out these sites:

home insurance
car insurance
life insurance
pet insurance

Back in the old days we would buy a house and the building society would tell us which company we had to insure it with. What they didn't tell us was that they were given a huge proportion of the premiums as commission - often half, sometimes even more. Eventually regulations were introduced which made it possible for people to buy their home insurance from wherever they wished and a whole new generation of insurers came along with much lower premiums - but old habits dire hard and there are still hundreds of thousands of families paying excessive premiums in the same old way, simply because they haven't got round to making the effort of switching, or because they still feel a little suspicion of the newcomers. Whilst a little cynicism is usualy a good thing, many of the top insurers are in fact owned, ultimately, by the big banks, many of which in turn were the building societies of yesteryear.

There is another twist to this tale. These new insurers are, like all the other major companies, businesses with shareholders who expect a dividend. Although their prices tend to be lower in real terms than those of the earlier insurers they still want to maximise profits whilst continuing to increase their numbers of policy holders - so many of them offer big discounts to new clients. If you are an existing policy holder you may feel that this is unfair - after all you may have been a loyal customer for many years so why shouldn't you enjoy the lowest prices? The answer is that the marketing people assume that once you are a customer you are likely to remain one and for the majority this is correct. If you really want to enjoy the lowest prices, and save yourself a great deal of money, you have to be prepared to change suppliers - and change them regularly.

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