’Underinsurance [is] a key cause of complaints in home insurance,’ says provider of automated property valuations
Homeowners have been warned that they may be missing out on essential insurance as thousands of homes start to switch to rental properties, a statement released yesterday (13 July 2023) said.
According to Hometrack, some 67,000 homes changed to rental over the last 12 months, with the average UK rent now standing at £1,126 per month.
The provider of automated property valuations said that homeowners may be deciding to switch their primary residence to reduce mortgage payments or increase their income.
“However, many of these homeowners may not be aware that they’re potentially underinsured as a result of this switch,” the firm added.
This is because home owners forget to notify their insurer of changes, which could in turn invalidate their insurance.
Hometrack added: “Underinsurance [is] a key cause of complaints in home insurance, according to the Financial Ombudsman Service, [with] only 79% of domestic property claims accepted in 2020 and 2021, according to ABI data.”
Consumer Duty
As a result, Hometrack has now opened its property listings data to insurance underwriters.
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This has five years of unique property reference number data available to help firms make more accurate risk assessments, Hometrack said, while also allowing insurers to reach out through their customer services teams if a property changes status without the customer notifying them.
It added this would support the insurance sector ahead of the FCA’s new Consumer Duty regulation coming into force later this month (31 July 2023), which requires firms to review their products and services against a new standard of fairness.
Ross Allan, director of property data solutions at Hometrack, said: “When it comes to the insurance sector, our property listings data is a no-brainer and can reduce barriers around claim acceptance and boost customer conversion for insurance firms.
“The FCA’s Consumer Duty is also front of mind for many insurers. Integrating Hometrack’s property listings data will also help deliver fairer outcomes for consumers and reduce the time spent dealing with customer complaints.”
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