Home Owners Should Ensure that they are Adequately Covered

Burglaries in domestic properties rose by 2.8% from the beginning of April to the end of June 2009 compared to the same period the year before, according to figures from the Home Office released last month.

The same period in 2008 saw 65,200 reported burglaries, with this figure rising to 67,000 this year, prompting Sainsbury’s Home Insurance to warn home owners to make sure they are properly insured.

The leading insurance provider revealed that the amount of claims made on home insurance policies has dropped this year, which could highlight the problem according to some people, who point out that it reveals that people might be underinsured. Sainsbury’s reveal that the drop in the amounts of claims made during the reported period was 13%.

Theft of some sort corresponds to 15% of claims made to Sainsbury’s Home Insurance, which means that members of the public are urged to check their policies and ensure that they are covered. They should also read the small print of any policy they are considering taking out so that they will not be left out of pocket if something should occur.

Sainsbury’s also suggest a correspondence between the rise in burglaries and the ongoing recession, with their Home Insurance Manager Ben Tyte commenting on the issue: “A rise in burglaries may not be a surprise during a recession but what is alarming is the decrease in theft-related claims over the same period which we fear may indicate that fewer people have adequate home contents cover in place.

“A significant proportion of all home insurance claims relate to theft, and we would urge homeowners to make sure their home security is up to scratch and that they have adequate home contents cover.”

In many cases, when people are feeling financial strain, insurance policies might be the first to come, but during a recession when everyone is feeling the pinch it leaves people particularly vulnerable to theft. It means that in the long run, getting rid of insurance might not save money at all.

“If you are not insured, becoming a burglary victim could severely hit your pocket,” Tyte adds.

Source: Sainsbury’s Finance Press Release Nov 2009

Home Owners Urged to Take Extra Care

When we take out any form of insurance, we might be doing so because we fear a range of incidents occurring, from theft and damage of items to structural damage.

However, one way in which both of these areas comes under great threat is through fires. In a recent press release from Aviva Insurance, they cite statistics released from the Association of British Insurers that shows a rise in fire claims from early 2007 to early 2009.

It means that the costs associated with fire damage are now at an all time high, with figures at their greatest amount since records began.

However, whilst these statistics are worrying enough on their own, more shocking is the report that many of the fire claims on home insurance are as the result of arson attacks on property.

“Fire claims are at their highest and we are seeing an increasing number of arson claims crossing our desks” said Allister Smith of Aviva, “Over 40% of all fires in industry and commerce are now started deliberately [according the figures from claims in 2009]”

He warns home and, in particular, business owners to be vigilant against such attacks. He cites a common cause of arson being waste storage outside of properties, where arsonists have been known to ignite bins and place them up against or near the property.

A range of preventative measures are encouraged by the insurer, ranging from businesses isolating electricity supplies to ensuring regular inspections are carried out on vacant or unfinished properties.

“Property owners should undertake risk management by implementing a number of cost effective measures.

“The Regulatory Reform (Fire Safety Order) 2005 (RRO) emphasises that the owner or employer in every workplace has a legal responsibility for implementing and complying with the Order. Businesses should have a strategy in place for managing fire safety, which includes identifying the risk of arson and acting to reduce it.”

Aviva cites statistics that claim 9,000 fires take place in empty buildings annually and damage caused the properties that are yet to be finished or generally unoccupied, are of great concern to insurance providers.

So having home insurance or any other form of insurance does not mean that people should not take necessary preventative measures to protect their property. With fire a serious threat, people should be very careful.

Source: Aviva Press Release Sept 2009

Figures Show That Some Home Owners Are Unaware of Such Rules

It can often be tempting to add extra areas to a property, adding an extension here or there to add more space and get the most out of the home.

However, figures released by Sainsbury’s Home Insurance reveal that 29% of home owners do not realise that they must inform their insurance provider of any such changes in the property.

The Bank also refers to figures released by TNS in July this year that shows how many people are planning structural change to their property, with 13% of home owners intending to carry out major work. This is actually a large decline on the same period in 2008, which showed 21% of people intended to carry out work.

Of these cases, the majority of work would cost less than £5,000, but a small number of people will be carrying out work that costs more than £100,000 according to the insurer. Examples of work could include conversion of the loft (just under 900,000 people), extending the side of the house (around 650,000) and converting the garage (around 630,000). These have changed from last year, with the second and third place previously amounting to construction of a conservatory and an extension to the rear of the property.

But with 29% of those asked unaware that they need to inform their insurance provider in advance, they could see any claims made invalidated, leaving them majorly out of pocket. If a home owner intends to make any kind of structural change to the property then they must inform their provider. This is because changing the size of shape of the house could change the value of the property.

“Buildings insurance premiums are calculated based on a number of factors, such as the type of house or the number of bedrooms it has,” said Joanne Mallon of Sainsbury’s Home Insurance, “So creating extra rooms can have an impact on your premium even if you have unlimited cover.”

So no matter how closely you know your policy in advance, home owners should always contact their provider. In addition, when searching for a home insurance policy, they should shop around and always read the small print.

“Homeowners should know that in the event of an incident happening during or after the works are completed they could be left underinsured or even invalidate their insurance entirely if they have not informed their insurer first,” adds Mallon.

Source: Sainsbury’s Press Release Aug 2009