Home insurance the next big price comparison battleground

Every month Consumer Intelligence surveys 2,000 home insurance buyers and recent months has seen a 10% increase in price sensitivity. This is the biggest jump since the survey began over 18 months ago. So what’s going on?

Ian Hughes, CI’s Managing Director, sheds light on the matter. “Consumers long ago woke up to the fact that they can save serious money on their motor insurance by switching providers. It was only a matter of time before they applied the same principle to home insurance. Recent mortgage and energy cost increases have seen home owners looking to offset these rises. Reducing home insurance premiums is a quick and easy way of saving money.”

Around 69% of motor insurance buyers confirm they used a price comparison website last time they renewed. Hardly surprising with 2007 seeing motor premiums rise at double the rate of inflation.

During the same period, home insurance premiums fell steadily but started creeping up again during December. In stark contrast to motor insurance, CI’s research shows that only 43% of consumers used a price comparison site the last time they renewed their home insurance. The difference would mean an additional 5.5m people using price comparison sites over the next few years.

“Up until recently consumers have been very slow to realise the benefits of switching home insurance providers.” explains Hughes. “Partly because of traditional prejudices towards mortgage lenders, not to mention the overall cost if there’s a cataclysmic claim. But continuing economic uncertainty is encouraging them to move fast - in increasing numbers - to take advantage of the significant discounts on offer.”

Over the last few months a handful of the home insurance market’s leading players have shaved up to 50% discount off annual premiums providing consumers with a golden opportunity. Hughes continued “Obviously we recommend consumers take advantage of the situation. Get out there and sniff out the best deals… you could save yourself a great deal of money!”

But while CI cites price comparison sites as a great place to start shopping around, Hughes adds an important caveat. “We’d also advise people to widen their search, bearing in mind that some of the biggest names in home insurance offer their best deals direct.”

At the moment CI’s research shows MoneySupermarket.com as the most popular price comparison site for home insurance. “Things are just about to take off for home insurance price comparison sites” predicts Hughes. “Provided the pricing, marketing and service delivery is right, they can expect rich pickings in 2008”.