Insurance News

Did you know that 20% of all home insurance claims, buildings and contents alike, refer to the same thing – water! Water damage is the bane of the home insurance provider’s life because the claims are made with the same problems behind them time and again. Whereas very little can be done to prevent theft, fire or natural problems such as wind or flooding, domestic water claims can be prevented if the right steps are taken in advance. Of course, it is not always the homeowner or tenant’s fault. In many cases, the problem occurs outside the home and has an impact within it.

The Association of British Insurers (ABI) has asserted that water damage to buildings and their contents costs the home insurance industry around £2 million per day. This is a huge amount of money that is drained out of the coffers for no good reason. For example, every year water is lost as a result of underground leaks, most of which can be detected and plugged. The water lost would fill approximately 3,880 Olympic swimming pools, which is simply staggering. Not only does this cause a major headache in terms of cost but it also causes untold environmental damage.

Having said that, there are some water home insurance claims that are at the heart of a major DIY problem. That is to say that homeowners are trying to do their own DIY and plumbing and doing more harm than good with 9.7 billion litres lost this way. Of course, this can cost more than a external leak. There was an example of this last year, with two flat owners claiming for one incident. A DIY related leak cost £20,000 for the flat in which it occurred thanks to a bit of inexpert drilling but cost the home insurance company covering the person living below £150,000 in damages. It really does defy belief.

So what can you do as far as your home insurance is concerned? Well, the first point is to make sure that you have enough cover because many people do not and water damage is amongst the most expensive types of damage out there. You should also make sure that your pipes are solid and that you know where they are in the walls so that you can avoid them when drilling holes. Finally, never undertake plumbing yourself. Always call in an expert. Unless you want a major bill of course…

Do you have buildings and contents cover on your home insurance policy? If you own your own home then the likelihood is that you do but some people choose to let cover lapse. Although most mortgage companies lending to homeowners have a stipulation in the contract saying that they will only lend as long as those on the mortgage invest in home insurance cover, many people are looking where they can decrease costs and unfortunately they are leaving their homes open to expensive damage as a result. Why? Because home insurance is still perceived in some quarters as an optional extra and not a must. However, if ever you needed a reason as to why you should have home insurance then take a look at the hassle those who have property have had as a result of the riots.

If you have home insurance and your home was one of those damaged in the riots then you can claim for the damage from them. However, if you have no insurance in your financial portfolio then you only have one option left – claiming compensation from the police. Under the 1886 Riot Act, or Riot Damages Act, anyone who has their home damaged as a result of a riot can claim from the police. There is no limit as to how much can be claimed back and there is no clause as to what levels of damage can be claimed for either. The only clause is that stipulating that claims must be lodged within 14 days. If you fail to claim within that time then you are left to foot the bill yourself.

Of course, there is no harm in submitting a claim to the police compensation scheme if your building has been damaged by the rioters but just imagine if it were as a result of extreme weather or a result of faulty electrics. That would either be one of those things or your fault and you would still be left with the costs to cover out of your own pocket. It really is a nightmare to try to find thousands of pounds from nowhere, especially if your building is unsafe and you cannot live in it in the meantime.

Always remember that home insurance may not seem like a good investment until something goes wrong. When it does, you need a good insurance policy there to rely on so make sure that your peace of mind is always in place!

A few weeks ago, I read an article that indicated that home insurance fraud was reducing, as was car insurance fraud. The industry, it said, was breathing a collective sigh of relief as the costs associated with fraud were going down. Well, that may be true of 2011 so far if those indications are correct but, according to another report this week, 2010 was an incredibly bad year for home insurance companies as far as their costs were concerned… and for homeowners and tenants given that their premiums will rise as a result.

In 2010 alone, there were approximately 133,000 fraudulent claims discovered by investigators in total spanning the entire insurance industry. This equates to roughly 2,500 a week, or a 9% increase on 2009. This may be down to the fact that home insurance companies are looking much more closely at claims than ever before but the cases have to be there to be caught in the first place. Not only did the numbers of bogus claims rise but the value of fraudulent claims also rose by 9%, with the value of all claims being £919 million total. There were 66,000 bogus or exaggerated claims detected in the home insurance industry alone, with some of the most outrageous stories ever being told to achieve a payout. Seriously, it makes you wonder how people have the audacity! The more unbelievable stories included an invisible wall, a flying toilet roll holder, a fake photograph and a completely fictional engagement.

After home insurance frauds come car insurance frauds in terms of both number and value, with 40,000 uncovered to the tune of £466 million. This is incredible when you consider that this includes people making up accidents, exaggerating claims and creating their own accidents with the sole purpose of making a claim. None of these scenarios are legal and all of them will lead to you being denied future insurance.

There are incredible and far reaching consequences of making a fraudulent car or home insurance claim, from not being able to get insurance with the same company to effectively being blacklisted to being prosecuted and sent to jail. It is illegal to even exaggerate claims and doing so will have an immediate knock on effect in terms of your insurance premiums too. There is absolutely no point in it so make sure that you stay on the right side of the law and avoid committing an offence. Honesty is definitely the best policy when it comes to home insurance!

We all have nightmares about home insurance, from dreaming about someone breaking into your house in the dead of night to actually having a minor fire thanks to a faulty wire or poor Christmas lights. Every homeowner and tenant has been there and has their own nightmare to share but this year the tables have turned. Thanks to the end of 2010 being unbelievably cold and the start of 2011 being wet, shaky and windy, the home insurance companies are having their own nightmare.

I’m sure that everyone remembers the record lows that occurred last winter, with the UK being buried under snow for weeks and weeks. With boilers breaking down, pipes bursting and all sorts of other problems coming as a result of the weather, home insurance companies faced millions more claims in 2010 than they had dealt with in the previous year. Unfortunately for them, 2011 has continued in the same way. There were major droughts, flooding, high winds and all sorts of other extreme weather conditions that have caused problems. In addition, there has been earth tremors and tornadoes in the UK. As you can imagine, this has definitely scared home insurance providers to the point at which premiums have been rising, but it is not only problems in the UK that will have had an impact on your home insurance premiums

Of course, we should be thankful that we do not live in Japan or somewhere else in the world that has really seen complete and utter devastation in the last 12 months but the fact remains that catastrophes the world over do have an impact on home insurance premiums in the UK. Flooding, tornadoes, earthquakes, ice storms and all other natural disasters and conditions allude to a really big shift in the global climate and condition so you should expect to pay more for your protection. Do not worry though because it will definitely be worth every single penny you spend on it!

So what can you do to protect low home insurance premiums? Well, not that much actually. If problems are down to weather and other such natural occurrences then you can do nothing about it, but you can look after your own. Check your pipes in cold weather and make sure they have sufficient insulation. Always trim trees that are close to your home just in case of high winds. Secure any loose guttering and ensure that your drain is always clear. All of the above will go a long way to ensuring that you do not have to make a claim.

Have you ever heard of a crime map? If you have yet to hear about one or see one then you are missing out really. You can access them online and see exactly how many crimes have been reported in your area. It is quite amazing really that such data can be correlated within an individual postcode or localised area. Needless to say, they have been used by many individuals looking to buy or rent a house as a house hunting tool. However, they have also had a rather bad effect on crime.

How would a crime map affect crime? Well, it hasn’t directly as such. The crime rates have been largely unaffected by it in real terms because they do nothing to deter the perpetrators of burglary or violent crime any. However, they have had a profound effect in terms of the reporting of crime. Homeowners have neglected to report numerous crimes by all accounts to prevent their house showing up on crime maps should they choose to move or rent out their property. Unfortunately, this has shown a false decrease in crime levels in certain areas and has also proved to be a little problematic for home insurance companies.

If you have been the victim of a crime and have tried to claim on your home insurance then you will know that you have to have a crime number in many cases for your claim to be processed. However, if you have no crime number because you have not reported it then you may not be paid for your claim at all. This is doubly annoying because it may still show up as a claim on your home insurance. This, in turn, would put your premiums up without any peace of mind for you.

It has been estimated that the number of people not reporting crime is around 5.2 million people. Of those 75% have ignored crimes like vandalism, drug dealing and other similar offences whilst 42% have not reported vehicle theft or defacing and 11% ave not reported violent crime. This not healthy for anyone because victims do not get what they deserve and those looking to buy or rent do not have an accurate picture of the area that they are moving to. As such, the advice is to use any home insurance you have when you need to. Worrying about the future in any way could prevent you from enjoying life, and the peace of a mind a good policy gives you, now.

Have you ever wondered how home insurance premiums are calculated? A lot of people do but very few actually find out the answer. Well, I’m about to let you in on a little secret. Although I cannot tell you exactly how premiums are calculated because the insurers rarely reveal such secrets, I can tell you some of the factors that make a difference. For example, there are reasons why your premiums will be lower if you live outside the city or town. Rural dwellers are perceived as having distinct advantages over urban dwellers when it comes to home insurance premiums and this is no new thing. In fact, it is pretty old. This relates directly to crime rates, which are notably higher in towns and cities, as well as the enhanced value of properties. However, all homeowners will have found that their premiums for home insurance have gone up recently regardless of where they live. This is thanks to the surcharge many insurers are adding onto the total to cover… (drumroll please)… terrorism!

Yes, you read that correctly. Many homeowners’ buildings insurance now incorporates a surcharge that is designed to cover any act of terrorism. As many people have claimed as a result of it since 2005, terrorism is becoming a major part of life, no matter how much we wish the opposite were true. Of course, any incidence of it is very rare but that has not stopped insurers making provisions just in case.

The average charge added to home insurance premiums has been determined at in excess of £60, which may not sound like a lot when it is broken down into £5 a month and this is often how it is packaged, but it soon adds up. It is not optional in many cases either but has simply been added because insurers have been compelled to pay out in the event of terrorism despite the fact that their terms and conditions often state that they will not pay out for that very reason.

Although some providers do offer such cover as optional, thus giving you the chance to decide whether or not you want to have that protection, many just added the premium on to that you would normally pay without telling you. Yes, we are all worried about terrorism but we should know exactly what our home insurance covers us for rather than just covering the cost and having no idea what we are paying for.

Home insurance is considered to be a must in your financial portfolio these days if you want to protect your interests. Far from being cover against crime, which was the major line of thinking a few years ago, it is now perceived as the ultimate all round policy. Offering protection against unfortunate activities that have occurred more and more often in recent years, it covers your home against damage caused by snow, ice, high winds, subsidence, flooding and other such natural events that can cause thousands of pounds worth of damage. As a result, it can help you to get your home back into full working order after a minor or major setback in terms of the structure of your home, but what about dealing with an emergency as and when it arises? After all, home insurance is designed for after the fact and not during.

Well, I’ve mentioned home emergency cover before and the fact that it is a good idea to consider it as an extra if you do not have it in your regular policy. After all, it can save you considerable money. Paying an emergency fee for a gas expert when a boiler has stopped working can be a real struggle for your average family whereas paying a monthly nominal fee can really ease the burden and get your boiler up and running again in no time… or can it? There have been recent reports of a certain well known gas company offering poor service on their emergency home cover, which is not a part of any comprehensive home insurance policy. In fact, one person has revealed that he was left with immense damage as a result of the emergency response, including damage to the liner and irreparable mistakes on the boiler itself. Although the company has now vowed to put it right, it does make you wonder whether it is worth it or not.

Well, there are ways and means around this. If you do decide to get emergency home response in addition to your home insurance policy then check out consumer reviews in advance because dissatisfied customers will tell you all about their experiences. You should also check their credentials in terms of what they ask from their employees because some may offer a well known name but do not have stringent enough requirements for employees. In short, compare compare compare until you are completely happy with your choice. You cannot put a price on peace of mind!

Subsidence is undoubtedly one of the worst nightmares that a homeowner could ever encounter. Causing property to shift and thus undermining its foundations and causing major structural damage over an extended period of time, it can create the need to pay thousands to get issues corrected and could even prevent your home from selling when you decide that it is time to move on. As you can imagine, it is also a major problem when it comes to insuring your home, whether you are looking for contents only or combined buildings and contents., but read on to find out why the summer of 2011 may put far more people into the worried category than previous summers.

As a direct result of the appalling weather we have had in the UK – the snow and ice, the torrential rains in some areas and the drought conditions this summer – many homeowners who have no previous history of subsidence are now facing major problems when it comes to the earth literally moving under their feet. In fact, 2011 is shaping up to be the driest year since 1990 and the year-on-year soil moisture deficit is greater than that of 2005, the year that last saw a significant number of home insurance claims for subsidence.

Home insurance companies have warned that significant claims for subsidence will see the cost of home insurance policies increase substantially next year, with homeowners in the south-east and London being particularly hit because of the   plasticity of the clay soil that is prevalent in those areas. However, if you have yet to even consider home insurance then now is definitely the time because you never know when you may need it.

The outlook for home insurance is not really looking that good at the moment in terms of the number of potential hazards that are cropping up, from flooding to freezing to subsidence but it just goes to show that you cannot afford not to have it in place. There are so many expensive problems out there at the moment and it could cost homeowners an absolute fortune to sort them out on their own. With plenty of deals currently available, it is time to start building up the no claims bonus by taking out an effective policy that works for you as well as giving you peace of mind. It is certainly worth the effort so why not take the time to compare policies today?

Quick quiz – hands up who’s guilty of leaving garden items out overnight because you have forgotten to put them away! Now hands up who’s guilty of leaving garden items out overnight because you have yet to sort out the shed to put them back in. Now hands up who’s guilty of leaving garden items out overnight because you will need them in the morning and think it’s fine to leave them where they are. Finally, hands up who’s guilty of leaving garden items out overnight because you just cannot be bothered to put them away. Whether you put your hand up once or four times, you are also guilty of risking a claim on your home insurance.

12% of all homeowners have expensive sports equipment that is stored in an unsecured area outside or is left in the open air during the summer, whether said homeowners are out or in bed. Either way, it gives thieves the perfect opportunity to take full advantage. Now, some home insurance companies will offer cover to items on your property, meaning within your property boundaries, but others offer that items have to be secured before they will pay out. In fact, the vast majority of insurers fall into the latter category.

Of course, there are other considerations in terms of home insurance and outdoor items that actually have decent values attached to them. This includes items like sculptures, fountains and table and chair sets. Of course, there are more items in the list than those given here but you get the idea. Covering these items under your regular home insurance is not usually possible but many insurers do offer extra cover that will protect them and give you peace of mind. The problem comes in that many people either fail to take out that cover or do not get a level that is suitable and this can leave you considerably out of pocket.

Home insurance is a rather tricky area of financial services to navigate today because there is so much to think about. There is no longer accidental cover in many cases, unless you pay extra of course, and there is often small print that excludes a variety of other elements, such as pet damage, items in an unsecured environment, failure to secure the home and so on. As such, you have to be absolutely clear as to what you are covered for and when you are covered.