Gocompare.com offers tips on how to avoid joining the 1 in 5 who have had household insurance claims rejected
With turbulent weather sweeping the UK and figures from the Association of British Insurers (ABI)* showing that one in five household insurance claims are rejected, Gocompare.com Home Insurance shares five tips for a successful claim.
Ben Wilson, from Gocompare.com Home Insurance, commented: “Home insurance claims generally arise during already stressful situations, such as when your home has been damaged by a storm or you’ve had a break-in. Add the possibility of having a claim refused, and it just makes matters worse. According to statistics recently published by the ABI, only 79% of home insurance claims made during 2013 and 2014 were successful. The main reasons cited for insurers not paying out were due to the incident or the value of the claim not being covered by the policy.
“As such, it’s important to start off with the right home buildings and contents policies – ones that cover all the things that are important to you and have excess levels which you can afford. Take the time to read the small print to make sure that you understand whether a policy provides the cover you want or whether you have to buy add-ons such as accidental damage or cover for bicycles. Better to make sure than to wait until you need to make a claim and discovering, too late, that you’re not covered. As well as explaining what is and isn’t covered, the policy wording will also contain important details about the procedures and paperwork required to make a successful claim.”
1. Buy the right policy – focus on cover, not just price
While it may be tempting to buy the cheapest home insurance policy available, don’t do so without first checking the excesses that apply and that the cover levels provided offer what you need. The ABI’s report concluded that ‘the claim value being below the policy excess and not having the right cover’ were key reasons why household claims failed.
Whether you’re arranging a new policy or renewing cover, it is essential that you compare policy covers, limits and exclusions and don’t just buy on price. For example, most (84%) of home contents** policies only cover accidental damage to your belongings if you ask for cover to be added and pay an additional premium. And, if you want to cover items away from home you’ll most probably have to top up your policy to include ‘personal possessions’ cover as most (84%) policies only include this cover as an optional extra.
It’s also really important to make sure that you have the right cover levels for your belongings. People often underestimate the value of their possessions and as such, could find themselves underinsured should something happen. With new valuables coming into the home throughout the year and especially around Christmas, such as laptops or games consoles, it’s worth keeping track of the value of your items and adjusting your cover accordingly. Online tools such as Gocompare.com’s contents calculator can help with this.
If you have valuable items, such as an expensive piece of jewellery, you should check whether they are covered and if any special conditions apply. Most home contents policies have a single article limit, so if the item is valued higher than this then you will need to arrange for it to be specifically included on the policy. To show proof of ownership in the event of a claim, you should also keep receipts and/or valuations for expensive items.
2. Read the small print – take care not to invalidate your policy
Your home insurance policy document will contain the terms and conditions relating to the policy. Typically, these may include the requirement to have (and use) certain types of locks on exterior doors and windows; notifying your insurer of building work carried out on your property; not leaving the property unoccupied for long periods; the requirement to report theft to the police within a certain time-frame. Failure to meet your insurer’s policy terms and conditions could invalidate your insurance and leave you with the cost of picking-up the claim.
The policy document will also outline the excesses – the amount you’ll have to contribute towards any claims made on your insurance (usually deducted from the amount paid out to you). For home contents policies compulsory excesses vary between £25 and £250, but most (85%) policies have an excess of between £50 and £100*.
3. Maintain and take care of your home and possessions
Wear and tear or damage caused by a lack of maintenance was also highlighted by the ABI as one of the main reasons for insurers rejecting claims. Home buildings and contents insurance provides cover for unforeseen events, not for damage to your property caused by poor maintenance or day-to-day use. Therefore, a claim for water damage caused over a period of time by a blocked or leaking gutter could be declined on the basis that the damage was preventable if only the policyholder had cleaned out and maintained the gutter. Insurers will also expect policyholders to take reasonable care of their property so, for example, they will more than likely refuse a theft claim if you went out and left your front door unlocked or a window open.
4. Act quickly and follow the procedures
If you need to claim on your home buildings or contents insurance you should follow the procedure detailed in your policy documents and report losses promptly. Your policy document will show your personal policy number and your insurer’s claims helpline number which you will need to call to register your claim and to discuss what to do next.
If your home has been burgled the first thing you should do is to call the police. They will need to investigate the incident and will give you a crime reference number which you will need to pass on to your insurer.
If your home needs repairs, your insurer will have to agree to the work before getting someone out to fix it. Some insurers insist on repairs being carried out by their approved repairers, or if you are arranging the repairs, they may require you to get quotes from a number of tradesmen. Unless it’s an emergency, don’t do anything without first consulting your insurer. Don’t dispose of any damaged items until told to do so by your insurer – they may want to assess the damage themselves.
Collecting evidence to support your claim, such as photographs of the damage, or receipts for items that have been broken or stolen, will be helpful.
5. Be honest
Don’t exaggerate the value of your claim or tell fibs - honesty is always the best policy when making a claim. If your insurer finds that you have been dishonest with any part of a claim, then they are entitled to decline the whole claim. This could leave you to foot the bill for any repairs or replacements yourself, and you may have difficulty in getting insurance in the future.
Gocompaqre,com has created a guide on making a home insurance claim.
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Notes to editors:
** Defaqto Matrix of 414 home contents insurance policies (27 January 2016) - instant and unbiased market and competitor intelligence, from independent financial researcher Defaqto. Percentages are rounded up to the nearest whole number.