RISING COST OF HOME INSURANCE SEES UK HOUSEHOLDS CHOOSING TO LEAVE THEIR ITEMS UNINSURED
- Sales of contents insurance have dropped by nearly 13% year on year
- Over half (55%) of UK households have seen their home insurance premium increase since lockdown began
- One in ten (11%) policyholders have recently decided to cancel add-on cover, for accidental damage, home emergency cover, or contents outside the home.
15 February 2021: As the UK is in another national lockdown, many people across the UK are leaving their homes and possessions exposed, as the increasing price of home insurance is causing many not to take out contents insurance as most continue to work from home during the pandemic.
According to comparethemarket.com data, the average annual contents insurance policy in September 2020 was £68. However, this rose to £82 in December 2020 – an increase of £14.
comparethemarket.com data shows that sales of contents insurance have dropped by 13% year-on-year. Of those who have had to renew their home insurance since the Covid-19 pandemic began in March, over half of those surveyed (55%) say they have seen their premiums increase.
Broken down by home ownership, only one third of renters (32%) have contents cover in place. Despite most renters not needing to have buildings insurance, due to being covered by their landlord, failure to have contents insurance leaves many exposed to significant replacement costs in the event of household items being damaged or stolen.
One in ten (11%) policyholders have also recently decided to cancel their add-on cover, suggesting belt-tightening in the face of tough economic challenges. Insuring individual valuable items appears to be another money-saving area with over half (52%) not insuring any individual items within their home insurance policy. Shopping around for contents insurance is an effective way to protect your items and ensure you are not paying over the odds.
Chris King, head of home insurance, at comparethemarket.com, said:
“At a time when households are struggling with their finances, discretionary spending often comes under a spotlight. Our research suggests that many people have chosen to cut costs by deciding not to take out contents insurance. This trend is concerning as leaving valuable items uninsured can often result in short-term gain but longer-term pain.
“While many factors come into play behind the costs of premiums, one trend we are seeing is that the underlying value of claims is on the rise. Weather is one such factor and this year saw some of the wettest weather on record, with three individual storms logged in February. The impact could now be starting to trickle through into higher premiums.
“Leaving belongings uninsured can leave households at risk of high replacement costs if these items are damaged or stolen. We would urge people to strongly consider keeping their contents cover, particularly if they have valuable items in the house that would be impossible or costly to replace. Shopping around online and comparing home policies can be an easy way to find a cheaper deal and save money, while providing peace of mind that your valuables and home are protected.”
Notes to editors
Censuswide survey on behalf of comparethemarket.com of 2,000 UK adults between 19-22 October 2020
comparethemarket.com was launched in 2006 and has grown rapidly over the past fourteen years to become one of the UK’s leading price comparison websites.
comparethemarket.com provides customers with an easy way to make the right choice for them on a wide range of products including motor, home, life, travel and pet insurance as well as utilities and money products such as credit cards and loans.
comparethemarket.com actively works with its brand partners to help provide great services to customers.
comparethemarket.com is a trading name of Compare The Market Limited. Compare The Market Limited is authorised and regulated by the Financial Conduct Authority for insurance distribution (FRN: 778488) and is registered with the Financial Conduct Authority under the Payment Services Regulations 2017 (FRN: 911617) for the provision of payment services.