Insurers are improving home, travel and motor policies Analyst Defaqto reviews products from a range of providers.

Personal lines premiums have been static, with talk of rates dropping in a soft market. But some insurers are moving away from using price to market their products. They are using devices, such as offering higher levels of cover, for example to meet the higher costs of sophisticated home entertainment systems and in-car electronics.

HOME

Over the past year a number of insurers appear to have concentrated on offering higher levels of cover in an attempt to attract and retain customers, rather than dropping prices.

In this sector Defaqto has also seen the beginning of a number of trends in which insurers appear to be catching up with the ways in which society is changing. Single item limits of £1,500 have been typical for a number of years, but many customers will now have home entertainment equipment - particularly flat screen TVs or projectors - which will be valued individually at more than this.

Insurers have now begun to increase their limits for valuables, both singly and in total, to reflect the much higher cost of home entertainment equipment.

Many people, particularly the retired, now spend long periods away from home - especially those with holiday homes in places like Spain. Almost half of the insurers studied now provide an unoccupancy period longer than 30 days.

ANNUAL TRAVEL

A number of high profile news reports in recent months have drawn the issue of travel insurance to the public's attention again. This may mean customers buying more insurance, or being more careful when going on holiday.

There are almost no policies around which Defaqto would consider to have inadequate medical limits, although the issue of single article and cash limits is still of concern. Many travel policies have inner limits which will be insufficient for customers who travel with video or digital still cameras, or who use cash in preference to travellers' cheques.

Over the past year there has been a steady drift towards £50 excesses as standard, with some insurers now going beyond this up to £60-£75. With the advent of FSA regulation there may be some opportunities for regulated companies to capitalise on their status, since travel agents are not so stringently policed. FSA authorisation status would be a positive selling point in this market.

MOTOR

Little appears to have changed in the basic motor policy cover. The exception is that insurers are now realising that many cars have satellite navigation equipment fitted.

Often this equipment will not be covered under the audio or in-car entertainment sections. Some policies now include a satellite equipment clause, although some limits imposed may be insufficient for the £2,000 plus that some of this kit can cost.

The big area in which insurers are now attempting to differentiate themselves is in the provision of accident management services. Insurers have acceded to customers demands that a courtesy car during repairs should be standard.

For years insurers have been claiming that price is everything with motor insurance. This is surprising as insurers include a wide range of additional covers and benefits which could easily be stripped out to keep premium levels lower. But, insurers claim that customers expect these benefits so they have to leave them in.

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