The latest research from data insight specialist Consumer Intelligence shows the cost of buildings and contents insurance has risen 0.5% in the last 3 months (to an average premium of $151), but remains competitive, with prices rising just 2.3% in the last six years. Despite this, further research uncovers that 14% of homeowners are now considering cancelling their contents insurance given they are now mainly based at home, and 11% who are suffering financially as a result of the pandemic are looking to reduce or cancel their policy entirely.
Unlike the car insurance market, where there’s fewer vehicles on the road and less claims being made, people are spending more time at home. The UK’s Office for National Statistics says that 49.2% of adults in employment are working from home now. On top of that, six million British workers have been furloughed to sit on their own couch.
John Blevins, pricing expert at Consumer Intelligence believes the pandemic will not only change the way we live, but also the way we interact with our insurance policies. He predicts this enforced behaviour change will have a knock-on effect to the rate of claims in the home insurance market:
“There’s an expectation that potentially more claims will be made, but to counter that you are now more likely to spot a burst pipe early so damage limitation could be applied.
“This potential change in claims activity and a possible reduction in volumes due to policy reductions and cancellations force insurers to amend their pricing strategies. However, it is too early to say which way we’ll see pricing go; we continue to watch carefully with interest.”