Insurance without the headaches

ONE of the most distressing things about buying house or car insurance is the thought that perhaps you are paying too much. But premiums have been falling, and if you give yourself plenty of time to ring round, you can probably make some savings.

You may qualify for a discount because you have put decent locks on your car or your house, or because you belong to a Neighbourhood Watch scheme, or because you are home all day, or because you put your car in a garage or do very few miles in it, or because of your job. Civil servants, teachers, police, firefighters and clergy, for example, can all pay lower premiums, either because they are considered low-risk or because they have banded for a group discount. If you belong to any organisations (a trade union, the National Trust or the Institute of Advanced Motorists, for example), they may have negotiated discounts. Even so, a discount is no guarantee of the best deal. Other insurers may be cheaper for everyone.

q You can approach the insurer direct (Direct Line alone claims 11-12 per cent of the market), use one of the company's own tied agents (say via a bank) or you can use a broker or other intermediary.

q Neither brokers nor other (untied) insurance intermediaries have to consider all policies when making their recommendations. In particular, they will ignore policies sold direct.

Ask brokers how many insurers they can select from (broadly speaking, the more the better, including access to underwriters at Lloyd's). Registered insurance brokers have to be with the Insurance Brokers Registration Council (IBRC) and have to abide by its rules (on solvency and client money accounts, for instance) and to have professional indemnity insurance.

q To get the addresses of three brokers near you, contact the British Insurance & Investment Brokers Association (Biba) at 14 Bevis Marks, London EC3A 7NT (0171-623 9043), or alternatively use Yellow Pages. You can contact the IBRC at 15 St Helen's Place, London EC3A 6DS to check whether a broker is a member or for a copy of its How to Complain leaflet.

q Other insurance intermediaries are covered by a code of practice issued by the Association of British Insurers.

q It is especially sensible to shop around if you are a "difficult-to- place" risk, a young driver, for instance, or if you are disabled or in a high-risk occupation or if you have got a high-performance or old car, or if you live in a house with a high rebuilding cost. Privilege, a Direct Line associate company, specialises in non-standard risks for car insurance. Elsewhere, Norwich Union Direct reckons to be able to give quotes to 98 per cent of callers. Trawl through Yellow Pages to find brokers to help if you are not a standard risk.

q Other insurers specialise too. Saga, for instance, specialises in the over-50s, and Endsleigh in the academic field, that is, teachers and students (students should also look at what their parents' policies might offer). Help the Aged also has policies for the over-50s.

q A Which? report (try your local library) will help you compare the cover that is on offer, but there is no real alternative to reading the policy. Most policies are written in reasonable English now, so while it will never be fun, it is no longer a near-impossibility. Look out for any liabilities and excesses (maximum cover for valuables, costs of staying in alternative accommodation while your house is under repair, subsidence excess and personal liability cover, for example). Look out, too, for whether property is covered outside the home.

q The ABI produces information sheets that tell you what to expect most policies to include and that could be helpful when you are choosing cover. You can obtain copies by sending a stamped addressed envelope to the ABI, 51 Gresham Street, London EC2V 7HQ. On claims, the ABI has leaflets on Claiming on your Home Insurance Policy and What to do When Making a Motor Insurance Claim.

q To help prepare your claim, you may want to use a loss assessor. A good loss assessor will help you find specialist builders and surveyors to give quotes for repairing damage, will get quotes for whatever you need to replace, and help you make your claim. You may find a loss assessor on what is left of your doorstep after a fire or other disaster.

q You can take out insurance to pay for a loss assessor through a company called the Loss Recovery Group. Cover begins at pounds 9 a year for losses of up to pounds 25,000. Your broker should be able to find you details. LRG has a national panel of assessors who carry out the claims preparation work, or you can find a loss assessor through your broker or from Yellow Pages. Loss assessors may charge an hourly rate or a percentage of the claim.

q If you reach deadlock with the senior management of your insurer, then provided the company is a member, you may be able to turn to the Insurance Ombudsman. You can accept or reject any decision the Ombudsman comes to, and still go to court if you want to, but the insurer is bound to pay you awards made by the Ombudsman of up to pounds 100,000. The service costs you nothing. Write to the Insurance Ombudsman Bureau, City Gate One, 135 Park Street, London SE1 9EA for a How The Insurance Ombudsman Can Help You leaflet.

q Insurers who are not members of the Insurance Ombudsman Bureau may be members of the Personal Insurance Arbitration Service, operated by the Chartered Institute of Arbitrators. You state your claim and comment on the insurer's defence but the arbitrator's decision is then final, and you cannot go to court if you do not like it. Application forms are available from your insurer and the service is free to policyholders.