How the Contents policies have been scored
Our scoring methodology for House insurance follows a similar pattern to all of the insurance products we score. Every policy has been analysed and a list of product features has been compiled.
First we identify the major players in the market and review their current policies. From this we compile a list of features. Features are aspects of the policy that provide benefits to the policyholder. These include cover for such things as accidental damage (as opposed to fire and perils), the amount of liability cover provided and policies that provide cover based on the size of the property.
In total we identified 49 features. Of these we rated 8 as core features.
The core benefits comprised more than half of the overall scoring percentage. The core benefits have a scale of points. For example, the clause that deals with cover limitations or even suspension of cover for unoccupied properties provides a sliding scale of points dependant on the length of time the property can be left unoccupied before limitations/notification requirement s come into effect. The longer the period the property remains unoccupied without a notification requirement then the higher the points.
When looking at the score you can draw a conclusion as the type of cover that is being provided. A product that scores low does not necessarily mean that it is a poor policy. What it does mean is that it has limited cover and the price charged should reflect this.
A high score and a low premium shows value for money.
For example the new NZI policies have scored well. The cover provided is very broad and includes features such as cover for tenants absconding with rental payments unpaid. No other company researched by us provided this. However the product features place it in an elite category and the price charged appears to reflect this.
Companies like AMI have good basic policy coverage but are light on features. The premiums they charge supports this. AMI also has a specialist product for landlords. Therefore their standard product does not duplicate cover from the more specific cover for rental properties.
It is also worth mentioning that some policies that provide accidental loss cover would pay out for the cost of replacing lost keys without the need for a specific clause for this. Some products we reviewed provide cover for events such as rectifying a property where it had been used by tenants for illegal activities such as a P lab. A word of caution, when a clause provides for this it effectively could mean that you are capped by the clause sub limit. Some policies that do not contain a clause for this type of event may still provide cover and may do so without a cap limit (effectively the limit would be your sum insured).
We therefore would recommend that when deciding on who will be your insurer, you need to consider more than just the price of the insurance.