The purpose of home buildings and contents insurance is to provide homeowners with cover for unexpected and potentially costly situations—such as damage caused by a storm or fire, theft of possessions, accidental damage from an escape of water, a fallen tree or subsidence. Yet, according to a study conducted by the Association of British Insurers, more than 20 per cent of all home insurance claims are rejected. The leading causes for claims to be rejected were found to be common, simple errors made by the homeowners. To ensure that you are successful in submitting a home insurance claim, here are the four most frequent errors made by homeowners to avoid:
1. Homeowners fail to maintain the quality of their home. Damage caused over a period of time—such as water seeping through a crack in the roof, which causes mould or other structural deterioration to occur—would not be covered. It is the homeowner’s responsibility to perform regular maintenance to ensure that the building is structurally sound.
2. The submitted home insurance claim does not exceed the policy excess. Some homeowners choose a higher excess in order to lower the cost of their premium. However, one of the main reasons that claims are rejected is that the value of the claim is below the policy excess. For example, if you were claiming £350 for a stolen TV but your policy excess was £400, then it wouldn’t make sense to claim. However, if the value of the item stolen was £1,000, this would be more than your excess and your home insurance claim would be worthwhile.
3. Homeowners are unfamiliar with what is covered under their policy. It is important when taking out a home insurance policy to carefully read the terms and conditions and what is and isn’t included. Some homeowners may believe that any damage that occurs to their home is covered by their policy—unfortunately, this is an inaccurate assumption. For example, a standard home insurance policy generally does not include accidental damage as standard. Other common things that might be missing include “gadget cover” and cover for items used “outside the home”. You may also want to check any “single item limit”, particularly if you have a valuable piece of jewellery or a piece of art.
4. Homeowners are underinsured which means that the “average clause” is applied. Studies show that up to 80% of UK residents have under-insured the contents of their home. This means that if you need to make a claim, you might not be covered to the full replacement value of the items damaged or stolen. Moreover, some insurance policies apply an “average clause” which means the insurance company can reduce your claim by the percentage you are under-insured.
If you are guilty of any of these common, simple errors, there are equally straightforward solutions. The following three pieces of guidance should help ensure that if you need to make a home insurance claim, your claim is paid:
1. Verify that your policy covers the cost to rebuild your home rather than its market value.
2. Ensure that your contents insurance covers all the valuables in your home, which includes the attic, shed and garden. Go through your house room by room (A-Plan will help you with this process) and revisit this every few years.
3. Make home security improvements such as installing locks, storm shutters or alarm systems.
However, the most effective method to ensure that your claim will not be rejected is to discuss your home insurance policy in detail with your A-Plan broker today.