Andrew Perryman who is Sales Director at specialist insurance website www.bestdealinsurance.co.uk is calling for urgent action in relation to buildings insurance.
“There are main two problems in the home insurance sector,” Andrew said. “The first is that many people simply do not bother to insure their homes. Despite the general consensus that buildings insurance is compulsory, there is no legislation nor any processes in place to check that a homeowner actually has cover.
“What is happening in Hull immediately springs to mind. News reports say that around one in four of the 40,000 damaged homes are not insured. This leaves the householders and, so speculation has it, tax payers* money, to foot the bills, which is anticipated to run in to thousands of pounds.
“The second problem in the home insurance arena is that many people buy a cheap policy on a non-advised basis, believing that they are fully protected."
Andrew cited how over 257,000 claims every year are turned down by insurance companies where there is inadequate cover or for customers that thought they would be insured on something and they were not.
“It can happen so easily,” he said “Someone will go online, see a cheap policy that on the surface that looks like it covers everything and will buy it, believing that they are fully protected and happy that have saved themselves a few pounds on their insurance.
“However, a bulk standard policy will only cover the bare basics and to get full protection, most people will need to buy additional cover for a small extra premium.
“Sadly many people make the mistake of buying the cheapest policy they can find. They may even shop around and compare it on a like for like basis with another, more expensive one and believe that the cheapest policy is offering the best deal, when in fact they aren’t. Hidden away in the small print could be any type of weird and wonderful exclusions” Andrew explained.
He recommends that anyone looking to renew or buy their home insurance read the key features of the policy document before buying – or use an experienced broker. “By using a broker, they will know which insurer is a ‘good’ insurer compared to one that has ridiculous claims criteria” he said.
“Certainly, if homeowners buy a policy on an advised basis, they can be confident that they are getting the cover they need.”
As to the problem of making sure that buildings insurance is compulsory, Andrew said that it is the responsibility of the Government and the insurance sector to “get together and ensure that foolproof checks are put in place so that no one is left financially vulnerable in the event of disaster.”
Andrew suggests on the spot fines or even compulsory insurance which could be achieved by some kind of registry: “After all, at the end of the day, it is those who are insured that now have to bail out those people who aren’t insured, and, many would say, this is unfair”.
