I'm curious if anyone has thought about churning car/home insurance taking advantage of the cooling off period? i.e. sign up with one provider, cancel within cooling off and sign up with a new provider again, rinse and repeat? I'm aware this is a lot of work but for the people that keep paying premiums and hardly ever have to claim anything then this could work? In the unfortunate event that you have to make a claim then have to stick with the current provider otherwise keep churning? Have I missed something critical here or this could be the way to save money if one can spend a few minutes every week?
Home Insurance churning?
macr0hard on 26/07/2022 - 11:42
Comments
This forum should be renamed to Oztightass
Seems like an easy way to get yourself blacklisted with a lot of insurers…
you realize these all have 3 day exclusion periods for floods, fires etc to stop gronks ringing up as their houses flood.
so apart from risking your most expensive asset for the sake of sfa in comparison, you risk a 1/7 chance (at best) of not being covered for these events.
More likely get blacklisted, and cover refused.i love saving money but this is sheer ridiculous and over the top.
Just sign up for the new one 3 days before the cooling off period ends to make sure you are covered? Simples!
and have 2 insurance policies overlapping by 3 days, good luck having that payout when they both insist the other pays
and so we are looking at 365/18 insurance companies over the course of a year that's a messily ~20
This "strategy" ultimately puts you at risk.
What a stupid suggestion…..
Just take the chance and do not buy them.
yep just have insurance from oct-apr (storm,flood,fire seasons)
anything happen in winter just live with it till oct and make a claim first week
but for the people that keep paying premiums and hardly ever have to claim anything
Very simply,
Premium = average cost x probability of claim + expenses/profits, etc.
Depending on the size of your excess and risk profile, the probability of a claim might be 1% but the payout might be 10-100x the size of your premium, so that doesn't mean you forego insurance (unless you can afford to self-insure - e.g. own many investment properties/are rich) or try stupid things. When you don't make a claim, part of your premium contributes to the 10-100x payout for someone who does. When it's your turn to make a claim, some idiot will complain the same thing.
Imagine the insurer finds out your stunt and you don't get the 10-100x payout - ouch. That's called penny wise, pound foolish.
I'd even question the 'penny wise' bit, if you have to spend time and effort on this on a regular basis…
I can tell you that insurers will all look at your tenure if you have a claim and their system searches the database everytime they type in your name, address, etc. and you will have a nightmare getting any claims paid.
Having previously worked at an insurance company if you're unlucky enough to have a claim within the first few months of the policy it will automatically be flagged for investigation. Even if it ultimately gets accepted it means you're likely going to be waiting a LOT longer for a resolution which should the unfortunate happen means you'll likely spend a lot more time trying to convince them you're not fraudulent than you could save in premiums. That being said the average time between claims for a home is something like 8-10 years (cars is about 3-5 years). Ultimately up to you but sounds like a fair bit of hassle.
I recently got my renewal with BOM Home & Contents insurance, went up a couple of hundred but thought I’d call up and see if they could do a better price. They said that they can’t do a quote on my address without cancelling my existing policy. Something about it gets flagged in their system. This includes any other companies that use the same insurance company (BOM is issued by Allianz)
From memory, most insurers share the same parent company. So they may share or have access to your details and know if you're dodgy when it comes to claim time.
Not worth the savings if it may lead to you being denied insurance in the future.
I've thought about this and actually done it as a stop gap measure. Say your policy runs out 28 days before you sell your house, or you have a bunch of properties with one insurer and you want to line them all up to renew at the same time (to negotiate with bigger buying power and less yearly hassle), you could use the cooling off period in these scenarios.
You're unlikely to claim and if you don't, you'll likely get refunded easily. Well, the one time I did it, it was quick, but given the time and hassle, it also convinced me there are better ways to save a dollar.
May as well sign up with all of them at the same time, hope your house burns down and collect multiple payouts.
House/car insurance churning can be worth it if you have an expensive house/car as the monthly premiums can be much more than a standard house/car therefore the time spent churning is worth it.
One way to find out is to try the churning idea and then if your house burns down see if the insurer will pay out.