Winter Home Insurance Claims and Cancelled Policies Soar
With some of the worst weather experienced for a generation and the longest recession since the 1930s it was not with surprise that both the cost of claims as well as the number of people stopping their insurance policies has increased.
Home Insurance Policies Cancelled
Normally you would expect during a recession that some people would see a contents insurance policy as a luxury and when renewal time comes they simply do not renew to save those precious hundreds of pounds each year that they simply can not afford.
And this time around is no exception with recent data from the Association of British Insurers showing that a massive 22% of people in the UK have stopped their home contents insurance policies altogether and more worrying is that 17% of people have cancelled their buildings insurance.
The latter is the startling statistic because this covers peoples’ most expensive asset, ie: their home. If you have a fire or suffer flood damage either from the rain or a burst pipe and have to have your home rebuilt then this cost could run into hundreds of thousands of pounds. The premiums for buildings insurance can cost a couple of hundreds of pounds per year if you use a price comparison service to find the best deals so it should not be something that should be left to chance.
On the other hand where contents insurance cover is cancelled this covers the ever increasing burglaries in the country and as electronic equipment is more ever present in the home and the cost increases so does the loss people may suffer.
We would always recommend home owners take out both sets of insurance even during recessions and for those who believe it will never happen to you or believe their possessions aren’t worth covering then they should think again. Most of the insurance companies allow you to calculate the value of your home possessions and the costs quickly mount up once you include televisions, MP3 players, kitchen equipment, carpets, painting and decorating and jewellery. These costs could literally run into thousands of pounds so it’s best to rethink if you are thinking of not renewing your policy this year.
High cost of Claims due to winter weather
Due to the cold weather this winter and the onset of heavy snow there have been over 335,000 claims for damage to homes, cars and businesses with the average claim being £1,805 according the the ABI. Actual home insurance claims were double what they normally would be this time of year at 60,200 claims costing the industry £194 million. People in Cumbria seemed to have suffered the worst with over £200 million having been paid out for flood related damage.
With the cold weather continuing to bite and unemployment continuing to rise we only see these figures increasing over the short to medium term.
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