Home and contents insurance remains competitive, but the industry is seeing premiums across the market rise towards the end of 2018 as a rise in subsidence and escape of water claims over the past two years has a significant impact on insurance rates. It has been predicted that 2018 won’t just be a “normal” subsidence year, but one that could set a record. Some loss adjusters are reporting a 300-400% rise in claims volumes through August to October 2018.
Escape of Water claims too are one of the biggest factors effecting household premium movement. According to the Association of British Insurers (ABI), escape of water claims cost insurers £3.9m per day and Consumer Intelligence listed it as the ‘largest driver’ for premiums. Whilst rising premiums are never good news for customers, it does create an opportunity for the broker to add more value. Contact customers ahead of renewal and discuss the potential price increase; proactively seize the opportunity to help them negotiate a better deal and offer risk management advice to limit the likelihood of claims – particularly for escape of water. Frozen pipes are the obvious cause for escape of water, and ensuring pipes are properly lagged is an obvious step. However, other steps can be taken should a cold snap hit, including ensuring the central heating is left on if leaving the property for any period, or getting the boiler serviced to ensure it doesn’t break down when needed the most. For subsidence, the greatest cause of claims will be tree roots as trees take a great deal of moisture from the land, so ensuring trees close to the property are regularly pruned can really make a positive impact.
As well as this, use it as an opportunity to review your client’s overall risk and insurance needs; they are householders, but do they also own a business – can you help them with their commercial insurance needs?