Sainsbury’s Home Insurance Warns People Against ‘Dumming Down’ Their Policies

 Over the last year or so, we have all been feeling the burden of the global financial crisis and in times of financial hardship it is not uncommon for people to cut back in certain areas to make ends meet.

However, Sainsbury’s Finance is warning against the current trend of cutting back on Home Insurance and other important areas as this might lead to greater financial hardship in the future.

Whilst it might seem desirable to cut out the cost of home insurance altogether, particularly if a person has not had to make a claim for a long time, the costs of putting things right should something occur without cover outweighs any such benefits.

The leading insurance provider cites figures that demonstrate how many people have cancelled or failed to renew they home insurance policy over the last year. According to the figures from ABI, 1 in 4 people fall into this category.

Ben Tyte, the Home Insurance Manager for Sainsbury’s Finance warns of the false economy associated with insurance cancellation, “In the current economic environment many people are looking to dumb down on their insurance or do away with it completely in order to save money.

“However, this is a false economy because if disaster strikes they could be left in ruin.  Rather than risk inadequate cover, they should shop around for better deals – it is possible to find quality cover at a competitive price – and find a policy that does not penalise them for paying on a monthly basis.”

As a direct result of this Sainsbury’s Home Insurance is offering a no claims discount of 30%, unlimited buildings cover and the chance to spread out the costs over a year without cost.

Recently, Sainsbury’s released figures pointing out that whilst the amounts of burglaries have been on the rise, the number of people making claims on their insurance has in fact dropped, leading some to conclude that it demonstrates that some people are underinsured. It means that whilst everyone should take effort to ensure they have home insurance, they should also check that their current policy adequately covers their needs.

Source: Sainsbury’s Finance Press Release Nov 2009

CompareTheMarket.com Warns Policy Holders to Ensure Their Garden is Covered

There have been many stories in the news recently that directly tie in to home insurance and the consequences of not being covered. Whilst the recession has inevitably left some people cutting back on their home cover, the recent floods across the United Kingdom have highlighted the importance of home insurance once more. 

But whilst it is easy to dwell on our homes within the walls of the house, how many people are covered in case of damage to the garden?

According to research carried out by comparethemarket.com, Britons that fail to find adequate insurance for their gardens may incur significant financial hardship, with the total cost for people in this country amounting to £10 billion.

So home owners are urged to make sure that items within the garden are covered by their household insurance policies. It could make the difference in claiming back on damage to items such as barbeques, plants and event furniture.

However, it is not just flooding that can cause damage to gardens with comparethemarket.com warning home owners to be vigilant against vandals as well. This amounts to over 600,000 garden owners that might have been targeted, with a further 1.2 million affected by robberies.

“It’s important to remember that home insurance policies can cover garden plants and furniture as well,” says Jeremy Moll of comprethemarket.com, “Although the value attached to vandalism and theft is high, we know UK weather conditions can also wreak havoc on our homes. There are steps people can take to save themselves money.”

The recessions is often cited as the reason many people are not covered in the modern day and the comparison website addresses this as well,

“Even with money tight, it’s not worth taking any risks and not having your home totally covered.”

So whilst ensuring that people take particular steps to protect their garden (such as securing or storing vulnerable items, taking apart large objects, covering immovable plants, fitting locks on gates and fitting lights, and making sure fence ownership is known), people should take extra steps to make sure their garden is properly protected.

Source: Compare The Market Press Release

A Quarter of Burglary Victims Affected

When applying a monetary figure to the consequences of suffering a burglary, the first task that might come to mind is weighing up the costs of numerous possessions, such as the television set, a DVD collection or other items around the house.

However, if recent figures are to be taken into account then home owners should take other costs into account – those associated with identity theft.

According to LV, the Liverpool Victoria Friendly Society, around a quarter of those that have suffered a burglary in recent times have also succumbed to ID theft, with the average cost of solving the problem amounting to £2,150.

As a result, the Friendly Society, which provides home insurance and other policies, has offered help to those that are covered by its home insurance policy. Those with LV’s home insurance will now be able to access an identity fraud helpline, which is free of charge.

LV= points out that when burglars enter a home, it can often be too easy for them to find  personal documents as the majority of home owners keep them in the same place. They quote an anonymous fraudster that highlights the issue:

“So many people make my job really easy by sticking all the key documents together in one place. And for all the family too, so you often get three or four identities for the price of one, so to speak”

Fraudsters can easily steal a person’s identity with items such as credit cards, ID cards, National Insurance cards and statements from the bank. As a result, they are highly valued on the black market, making them prized possessions for would-be thieves.

So as well as ensuring that home owners have home insurance, it is being urged that they also have security measures in place to protect themselves. This includes ensuring that personal documents are secure and are not all located inside say, a single handbag.

The problem could be of particular concern if statistics from Sainsbury’s Finance are taken into account from November. From the beginning of April to the end of June 2009, the insurer states that 67,000 claims on home insurance were made as a result of theft.

Sources: LV= Press Release Sept 2009 and Sainsbury’s Finance Press Release Nov 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