Home insurers saved more than £100m as a result of lockdown, thanks to a huge fall in the number of claims being made.
Despite millions of people being forced to spend more time at home as a result of furlough, remote working or redundancies linked to COVID-19 claims for home accidents fell by as much as 20% in some parts of the country.
A new report compiled by insurance broker Safe shows that there were 32% fewer claims overall compared to the same period in 2018.
The broker suggested that the changes were down to more people spending time at home.
Considering that 80% of burglaries occur during daylight hours (according to the Office for National Statistics) this was likely to be a strong deterrent to many would-be burglars; as well as an important factor in preventing domestic accidents, such as fires, which could lead to other types of claim.
It is not a surprise to see that home insurance claims have decreased in a significant way, with many Brits stuck at home during the lockdown period. Indeed, as we observed with car or health insurance products, the payouts made by home insurers have gone down. However, until now, no company has decided to lower the premiums on home insurance. This is a questionable position when the impact of the economic crisis is just starting to strike British households and could last for years.Said: Antoine Fruchard, Hello Safe’s CEO
The average cost of home insurance premiums has risen by as much as 27% in the past three years, according to Safe. The broker said it would ‘make sense’ for these to fall in the coming years.
According to Money Supermarket, at the end of June, the average cost of an annual building and contents insurance policy was £142.
But despite the creeping cost of policies, which many homeowners are obliged to take out under their mortgage contract, the reduction in almost all categories of claim led to insurers saving millions of pounds, nearly across the board.
Theft and burglary claims were reported to be 37.5% lower than usual, leading to savings for insurers of around £25.6 million.
Water damage claims also plummeted, reducing by nearly a third, or savings of £43.6 million in payouts.
Experts at Safe speculated that those forced to stay home through lockdown may have found time to carry out home repairs and maintenance, leading to fewer claims of this type.
Yet even though insurers pocketed huge savings over lockdown, not all types of claim reduced in number.
Accidental damage was the only category of insurance claim which increased over the lockdown period, with the number of cases rising by almost a third, and insurers paying out £18.4 million more to homeowners than they normally would have.