Cutting cover could cost you
We’re all spending more time in the house.. but we still need home insurance, says Lisa Salmon
WITH many people struggling because of job losses and wage cuts, some are considering saving cash by ditching home contents insurance.
The cost of insurance has risen 0.5 per cent over the last three months, according to financial services researchers Consumer Intelligence (consumerintelligence.com).
That puts the average annual buildings and contents insurance policy at £151.
And because so many more people have been working from home since the pandemic started, one in seven homeowners (14 per cent) are considering cancelling their contents insurance, as the burglary risk is lower.
However, although there’s less chance of homes being burgled because people are in them all the time, experts say the chances of making a claim for accidental damage has increased. After all, the longer you’re at home, the more chance there is you’ll break something.
But if you do submit a claim on your home insurance, research by the Association of British Insurers (ABI) (abi.org.uk) shows one in five claims are unsuccessful, mainly because people don’t know what they’re covered for. Here, Sarah Brodie, property insurance provider for the Association of British Insurers, answers common questions about home insurance.
1 If I buy home insurance with a cheap provider I’ve never heard of, are they much less likely to pay out on claims?
“It’s important to get cover that meets your needs – this isn’t always the cheapest available. The home insurance market is competitive, with many providers that pride themselves on paying out claims and good customer service. If you’re unsure of the credentials of the insurance provider, you can check if they’re regulated by the Financial Conduct Authority (fca.org.uk) (FCA), or the Central Bank of Ireland (centralbank.ie/regulation) in Ireland. Firms regulated by these authorities are subject to strict regulatory requirements on how they handle customer claims.”
2 If I accidentally get details (such as the type of door locks) wrong on my application form, will an insurer refuse to pay a claim?
“When applying for home insurance, it’s important to fill out information honestly and provide information to the best of your knowledge. If you find you have accidentally got some of the information wrong, you should contact your insurer straight away. They’ll be able to update the information on your file.”
3
How much do premiums tend to go up if you make a claim? Is it sometimes not worth claiming because the premium will go up so much if you do?
“Insurers will take into account a number of factors when determining a customer’s premium, this includes factors such as claims history, rebuilding cost, crime rates and flood risk. Having previous claims doesn’t automatically mean you’ll pay more for your cover.”
4
If I feel my insurance company isn’t treating me fairly or is refusing to pay a claim, can I appeal against their decision? “Each insurer will have a set procedure for making a complaint. If you’re unhappy with how your insurer has treated you, the first step is to make a formal complaint with them in writing. If, after following this process, you’re still unhappy, you can take your complaint up with the Financial Ombudsman (financialombudsman.org.uk) in the UK, or the Financial Services and Pensions Ombudsman ( fspo.ie) in Ireland, who will independently review your case.”
5
Does it make any difference to my insurance premium if I live in a Neighbourhood Watch area or have a house alarm?
“Insurance premiums take into consideration a broad range of factors. While location, including crime rates, is considered, there are several other factors that will also be taken into account. Insurers often use information on how secure a property is when they are deciding whether to offer cover, and what premium to charge. Improving the security on your home, such as fitting alarms or high-security locks on windows, can help make sure you get the best possible deal when you buy or renew your cover.”