Home Over Paid Home Insurance. Any Chance of a Refund?

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I think I know the answer to this one but here goes.

I purchased home insurance through my home loan provider a couple of years ago. With finances being so tight, I called the insurance company to bring down the value of the policy.

Low and behold the insurance advisor nearly fall off their chair when they saw the amount of premium I was paying. They truely were bewildered were such high figures had been obtained from.

The structural aspect of the policy was valued at twice the cost of my mortgage and three times the sum of what it would cost to rebuild the property.

Is it possible I could ask for a refund or is this a no go?
 
Your bank was acting as an insurance agent a couple of years ago and as such should be recommending realistic figures. Although rebuilding costs have come down a lot since the boom, yours sounds like it was overstated even for the time.

I'd certainly ask your bank's insurance department in writing to outline exactly why they recommended the particular figure to you a couple of years ago, i.e. how the sum insured was calculated.

Frankly I wouldn't be massively confident of a successful outcome for you as the bank may well be able to come up with a justification for the recommended level of cover, but it's no harm asking.
 
An insurance agent would never give advice on a rebuilding sum insured. It is up to the customer to review the adequacy of their sums insured.

Its more than likely that the bank made you take it out for a certain amount. The sum insured probably increased year on year with the inflation linking that most insurers would have included - went up about 6% a year back in the day.

Will you get money back? Not a chance! As mentioned above they will tell you it was up to you.
 
peteb said:
An insurance agent would never give advice on a rebuilding sum insured. It is up to the customer to review the adequacy of their sums insured.
Click to expand...

So if a customer requests a sum insured that is wildly excessive, are you saying that an insurance agent has no responsibility to advise their client?
 
I'm telling you an agent is not in a position to give advise as to the rebuilding cost of a property. They are not a surveyor or builder. And wouldn't have a clue. Best case scenario they refer to them to the SCS rebuilding guide to make their own judgement.

If an insurance broker/agent were to advise a client as to the rebuilding cost and there was a property claim they would be exposed to getting sued for advice they shouldn't be providing.

Most standard letters I would assume probably make a comment that a customer should review their sums insured to ensure they are sufficient.

How does an agent know it is wildly excessive? They havent seen the house in question. They don't know the level of fit-out. Someone could have have a 12k kitchen, with golden stairs throughout the house. There is just too many variables involved.
 
Fair enough. I take your points. As a broker on the life side, it just strikes me as unfair that a bank (acting as agent) can arrange a policy of insurance and get paid for doing so in the normal way, but yet be entirely blameless if the amount of cover is completely unsuitable for purpose.
 
House insurance when taken out with the mortgage is perhaps slightly different as the bank appointed valuer will have specified an amount the house has to be insured for so it is not up to the customer to choose in that case, index linking has probably made it too high at this stage. Still don't think you will get a refund though.
 
You are all correct, there will be no refund.

The policy was excessive to the extreme according to the bank and insurance company, so a major blunder made by the banks valuation department.
 
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