Common questions people ask when taking out insurance

In 2020, after an eighteen-year hiatus, Family Fortunes returned with Gino D’Acampo as host. Throughout the show, two families compete to provide answers to “everyday questions”, which can range from the most common lucky charms to the most popular nicknames for your significant other. 

When it comes to insurance, it’s much the same. There are certain questions that as a financial adviser, I see crop up time and again. 

It’s in the nature of the role that clients want to mine your expert knowledge, but it may come as a surprise to many exactly what type of information they’re after. For instance, a phrase I often hear is “What is it?” – “What is Home Insurance?”, “What is Mortgage Protection?” and so forth. Likewise, queries abound around product type, how likely it is that their claim will be accepted, and what will be included in a policy. 

Such seemingly foundational questions arise more than you may imagine – homeowners will tend to have Buildings Insurance locked down because it’s a requirement of taking out a mortgage, but as for other policy types, understanding can vary wildly. Contents Insurance is a particular sticking point, with customers frequently enquiring about a potential claim – “will my wedding ring, my designer bag, my collector’s painting etc be covered?”.

On this, clients also tend to be less confident about accidental damage, with many clients I’ve encountered showing unawareness of if/how it is included in their broader contents policy. With rafts of people now working from home on a regular or semi-regular basis, I’m also increasingly being asked how a policy’s coverage extends to office equipment such as laptops.

This inquisitiveness and desire for clarification is especially common among first-time buyers. As more inexperienced clients, this cohort typically seek greater explanation and detail than older homeowners who have “been there done that” and developed their preferences over time. 

Previously held policies will also help indicate to an adviser what these priorities are, and provide useful context that they can leverage to anticipate customers’ future requirements. Indeed, in a recent survey from The Initiative for Financial Wellbeing (IFW), eight out of ten people with financial advisers explained that they value an adviser for their ability to “help me find out what my future self might want and need”. 

And yet, from day dot, without fail, the number one question I’m asked is “How much does it cost?”. 

It may be that in light of the biting cost of living crisis we’ve all seen and felt in the past few months, price has resurfaced as the key consideration among clients.

This is worrying, especially with recent YouGov research commissioned by Paymentshield revealing that nearly half (49%) of UK consumers believe that price is the only differentiator between Home Insurance products. 

Helping consumers to understand that price is not necessarily king is the hardest part of the job. There’s a reason why certain products are cheaper than others – because the policy coverage is often lacking and inappropriately so for many customers. This can mean clients end up losing out more financially than they ever would if they initially took out a policy that cost a little more.

Even as sentiment swings back and forth on price vs value, the adviser “Family Fortune” fundamentals have stayed relatively constant over the years: clients come to us because they want a specialist’s perspective, require clarity, or need reassurance. It’s no surprise then that by the end of my interactions with clients, the most common question I hear is “Why didn’t I speak to a financial adviser sooner?”.

Article last updated: 17/04/2023

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