How Safe Is Your Home Insurance?

Online, November 18, 2010 (Newswire.com) - Millions of people in the UK are putting their homes at risk because they make inaccurate declarations when applying for their insurance, warns on-line household insurance provider homeprotect (www.homeprotect.co.uk).

homeprotect chief executive, David Walker, says insurance companies themselves are often to blame for assuming too much knowledge on behalf of their customers and not asking the right questions at time of application.

"Buying property insurance can be both stressful and confusing, particularly if householders find themselves in circumstances considered unusual by the majority of the insurance trade. For people with straightforward circumstances, buying a policy is often considered to be an easy thing to do. However, the reality of the process is often quite different, particularly, where material facts are overlooked. For example, taking in a lodger or having a property undergoing renovation are both points that can be innocently omitted" says Walker.

"We want to educate consumers so they understand the risks and implications of non-disclosure of information, which may seem trivial to them but can actually invalidate their household insurance policy leaving them exposed when it comes to crunch time.

"What we are seeing with more and more householders who approach us for a quote is that some insurers are either not asking the right questions to elicit the material facts or don't make clear what is not covered. For example, some insurers do not ask if a property has been previously flooded or don't ask if the policyholder has ever had a criminal conviction. Others don't make clear what is not covered, particularly when it comes to online purchasing as customers are often fast-tracked to the 'buy page'."

"Most of the time people get away with it, but they should understand that their homes may be at risk if they submit inaccurate applications for household insurance. There's no doubt that buying insurance can be a minefield," said Walker. "The insurance industry should be doing more to educate the public and make life easier for them. Most honest citizens do not understand how insurance works - and who can blame them?"

Common areas where innocent non-disclosure is most likely to occur include:

Property owners taking in a tenant or lodger.

People who work from home, unless in a purely clerical capacity. For example, where they have work-related visitors; hairdressers are a classic example of this.

The 15% of the adult population with criminal convictions. You have situations both where the ex-offender thinks their conviction is spent even when it is not and also where the policyholder has not declared the conviction of someone else who lives at the property (e.g. a child, partner or lodger)

Properties that are undergoing renovation or have had recent extensions where another room or rooms have been added.

Unusual properties, e.g. barn conversions or eco-homes; by not declaring this at the time the policy is taken out, it means the insurer can refuse a claim, reduce the amount payable or cancel a policy on the basis on non-disclosure.

Individuals who have had insurance refused, cancelled or had special terms imposed. This should be declared to the new insurer.

People who have had a liability claim made against them.

"These are all typical everyday situations which can occur, often once an insurance buyer has already agreed the terms of a policy. Their insurance is based on the material facts of their circumstances and so if new circumstances arise they must be declared to the insurer. There may be instances a buyer may feel a change in circumstances is not 'worth' mentioning to the insurer, but they should understand that whatever the situation, the risk to the customer is the same - their policy may no longer be valid and when it comes to making a claim, it could be reduced or refused based on the omission of the information.

Insurers sometimes ask unreasonable questions that would unfairly penalise truthful answers, creating a temptation to tell 'white lies'. If, for example, cover has been refused, it will make purchasing insurance more difficult and potentially more expensive. Yet there may be absolutely nothing wrong with the property" continues Walker

"One client had alerted his previous insurer to his suspicion of possible subsidence. It turned out to be a false alarm, but the company refused to renew his cover placing an indelible black mark over the property. It was incredibly unfair and, although it would be wrong to do so, you can see why people are tempted to bend the facts in these circumstances," said Walker.
Ends

Contact details
For further press information, please contact:
• Parm Evans on 07024 044114 or at [email protected]
• Mark Baylis on 07775693994 or [email protected]

Notes to editors

1. homeprotect (www.homeprotect.co.uk) won the broking initiative of the year at the 2010 British Insurance Industry Awards following the success of their pilot programme.
2. homeprotect has been shortlisted for the broking initiative of the year at the 2010 Insurance Times Industry Awards.
3. homeprotect has been shortlisted for best SME business in Kingston Business of the year awards 2010.
4. homeprotect is a leading provider of non-standard household insurance online. Non-standard insurance customers include those who live in high flood and subsidence prone areas, those who work from home, asylum seekers, the unemployed, owners of properties with flat roofs, owners of listed buildings, residents of shared occupancy homes and people whose properties are made from non-standard materials.
5. homeprotect is not an insurer, but rather sells and administers their own insurance policies on behalf of their panel of insurers.
6. homeprotect policies are underwritten by a panel of specialist non- standard underwriters including, Plum Underwriting, Prestige, Woodbrook.
7. David Walker is the founder of avantia group (www.avantiagroup.co.uk) and set up the business in 1997 via its precursor a2k: affinity. avantia group comprises avantia insurance which markets homeprotect and avantia assistance which markets a unique assistance product centralized around the alphanumeric phone number.