Why You should Be Taking Action if You are Among the One in Five UK Households without Home Insurance

The 30th anniversary of the Great Storm of 1987 this month was a timely reminder of the importance of home insurance.

According to The Actuarial Post: “The Great Storm of 1987 was the most costly windstorm the UK insurance industry had seen to date. Claims reached £1.4bn (gross of reinsurance), which equated to nearly 50% of total property insurance premiums.”

Yet despite the more recent damage wreaked by Hurricane Ophelia in Wales and Northern Ireland, one in five homes in the UK is not covered by home insurance. That equates to 5.41 million people.

The survey carried out by housing and homelessness charity Shelter showed that despite the fact that winter is a peak time for insurance claims, people are ignoring home insurance altogether, or opting out of renewal, with 42% claiming that they cannot afford to take out cover.

The implications of not having home insurance, however, could be considerable. If a fire begins in an uninsured home and then causes damage to other surrounding properties, any uninsured person would be liable for repairs to all the damaged properties.

Although home insurance is not required by law, in the same way as car insurance, if you own your home outright, there’s a strong argument that it should be.

That’s why if you’re buying your home with a mortgage, your lender will almost certainly require you to have home insurance coverage. This is to protect your home in case of damage by unforeseen circumstances, such as fires or natural disasters.

Should Home Insurance be Compulsory?

Jason McClean of Thepropertyinsurer.co.uk thinks it should. "Home insurance is not compulsory by law but maybe it should be because the repercussions of having no insurance can be similarly devastating as a car accident – not just for the home owner but for families and people living in adjoining properties,” he says.

He explains that without home insurance, you could be made homeless.

But, he says, it gets “even worse If the uninsured property is a terrace, semi-detached or flat/bedsit and when it is destroyed it takes out one, two or three more properties around it”
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In this kind of scenario a £1-million bill could be easily reached when you add in the total rebuild and contents payments, as well as any injury claims.

“Without insurance the careless or penny-pinching home owners are harming other people and that is the reason why the Government needs to make Home Insurance compulsory in the same way as car insurance.”

What is Home Insurance?

Home insurance is an all-rounder term that covers two different types of insurance:

  • Buildings insurance: for the structure of your home and the permanent fixtures and fittings, such as kitchens and bathrooms.
  • Contents insurance: for your home possessions, such as furniture, TVs, personal belongings and some types of flooring including carpets.

You can buy both types of insurance separately. Generally, however, you can get them more cheaply as a joint policy from one insurance company.

What Home Insurance do You need?

If you’re a homeowner you’ll need both buildings and contents insurance. If you’re renting out a property, you’ll need buildings insurance. If you’re a tenant, you’d be well advised to get contents insurance.

Home insurance costs, reports moneysavingexpert.com, have risen this year by 6.8% for buildings insurance and 4.4% for contents insurance.

How do You keep Home Insurance Costs Down

  • First, if you can afford to, don’t pay your premiums monthly but pay annually
  • Second, don’t auto-renew out of laziness: insurers keep their best deals for new customers.
  • Third, shop around and if you have specialist circumstances, then use a specialist home insurance broker.

For a full guide on getting the right home insurance, see our article here.

For personalised advice on the best home insurance policy for you, contact us here.

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