The Impact of Coronavirus on Home Insurance
Your FAQs answered
For the most part of 2020, millions of homeowners in the UK have been staying home to try and help combat the spread of the Coronavirus (Covid-19) pandemic.
In addition to the impact on people’s health and wellbeing, many have suffered financially as a result of the crisis, so a lot of policyholders are concerned about keeping up with monthly premiums and are looking to potentially cancel their cover or at least get some money back if possible.
A lot of insurance companies are fully aware of the devastating impacts Coronavirus has had on the nation and are doing all they can to help provide relief to their customers. For example, Admiral have been giving £25 refunds to their car insurance policyholders.
But what about home insurance? Is it possible to get a refund? And how has the Coronavirus pandemic affected your policy?
We answer your questions here.
How does the Coronavirus crisis affect my home insurance policy?
For most home insurance policyholders, the Coronavirus pandemic won’t have had any major impact on their policy.
The Financial Conduct Authority (FCA) has been urging insurance companies to treat their policyholders as fairly as possible, particularly if they’re in a “vulnerable position because of the Coronavirus”.
The FCA also stated:
“We except firms to consider very carefully the needs of their customers and show flexibility in their treatment of them [...] We would not expect to see their ability to claim impacted by circumstances over which they have little control.”
Each home insurer has differing terms, however, so if you’re unsure about where you stand with your policy, be sure to contact them directly to find out more, bearing in mind that they must treat you fairly as per the FCA guidelines.
Are insurers offering refunds on home insurance policies?
A lot of policyholders have stated that they feel premiums should be reduced due to the fact that they’re staying home more and are at a lower risk of theft as a result.
According to Which?, it seems that people with home insurance policies are not going to be offered refunds. Which? says that even Admiral is not offering a refund for those with home cover, despite them giving £25 refunds to existing car insurance policyholders.
Read more: The Average Cost of Home Insurance
The main reason for this is because insurance companies have seen an increase in the number of claims being made on home policies, despite a particular reduction in theft claims.
Increase in claims
Home insurance companies Admiral and NFU Mutual have both witnessed more people claiming on their policies for accidental damage, in addition to Hastings who is also preparing for more property-damage claims.
Many other insurers are expecting to see a rise in other types of claims for things like fire and water damage, even though they haven’t experienced an increase in those types of claims just yet.
With most companies expecting more claims to be made on home insurance policies due to most people staying at home, this is the main reason why refunds are not being offered and premiums are not being reduced.
Since 18th May 2020, the FCA has put measures in place stating that insurers are to offer payment holidays to their policyholders who are suffering due to the Covid-19 crisis. In addition, they should offer reduced cover and refunds to customers who are struggling financially where possible.
What if I'm struggling to pay premiums?
If the Coronavirus pandemic has caused you to suffer a negative hit to your finances, and you’re looking for some financial relief on monthly payments for the time being, the best thing you can do is contact the companies you have contracts with to see what help they can offer you.
One insurer that’s currently letting their customers defer payments with a payment holiday is Aviva. Payment deferrals will be offered to Aviva’s customers who:
- Are self-employed and cannot work due to the Coronavirus pandemic.
- Have been furloughed by their employer, but haven’t been paid 80% of their salary yet.
- Lost their job after 1st March 2020.
If you have a home insurance policy with Aviva and you can relate to any of the above criteria, you can get a payment holiday of 90 days (3 months). If you opt for a payment holiday to ease the financial burden of Covid-19, you will still be covered and it won’t affect your policy.
It’s worth noting that having a payment holiday on your home cover will not affect your credit score directly, but bear in mind that there is a slight chance it could affect your future credit applications, as some insurers will look at a range of aspects to determine your eligibility for credit.
No matter which insurer you’re with, get in touch to see if they can offer you similar help.
Working from home - should you tell your insurer?
If you’ve had to work from home during the Coronavirus pandemic which has required you to carry out clerical, computer-based work at your desk, it is likely that you will not need to contact your insurer to let them know about this.
However, if you’re unsure as to whether or not your situation is fully covered, you’re better off contacting your specific insurer to find out where you stand.
Your standard home cover won’t cover you if you’ve had to claim due to business clients visiting your house, but it’s unlikely that this will have taken place due to lockdown measures anyway.
Is my office equipment covered with my home contents policy?
Any equipment provided to you by your employer to help you work from home should be covered by their own business insurance policy. If any of that equipment is damaged or gets stolen, you will not have to make a claim on your own policy.
If you’ve bought more equipment or furniture to help you work from home, you might need to increase the value of your contents cover, depending on the costs.
Additionally, if you have stock at home that’s for your business, you will need to contact your insurer to let them know. You may even need to add an extra clause to your business insurance policy to make sure that all stock is covered in your home.
Leaving your home unoccupied
Usually, home insurance policies do not cover you if your house is unoccupied for more than 30 days. Depending on your insurer and policy, you may have a longer limit of 60 days.
However, due to the Coronavirus outbreak, insurers are fully aware that many homeowners may need to keep their home unoccupied for a much longer period, most likely due to the following reasons:
- You’re currently living with someone else while self-isolating
- You’re abroad and have been in quarantine or unable to fly since the Covid-19 crisis
In many cases, insurers have removed this clause from their policies due to Coronavirus, or they’ve extended the duration of unoccupancy, so you shouldn’t have any problems if you haven’t been in your own home for a long period of time since Covid-19.
To find out more about where you stand with this, contact your insurer.
I’m staying somewhere else - are my possessions covered?
This depends on whether or not you have personal possessions cover included with your own home insurance policy.
If you’re living with family or friends to self-isolate, your possessions will be covered for theft and damage if they’re listed in your policy.
To find out where you stand with this, you will need to check your policy details or contact your insurer to find out more, as some companies, like More Than, are happy to protect their policyholder’s belongings even if they don’t have personal possessions cover.
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And for further information regarding home insurance, be sure to browse our related articles for further information.