The figures come from Go.Compare home insurance, which applied its latest survey results to ONS data to calculate the number of people at risk of losing their policy. The home insurance comparison site said several factors can cause a policy to be cancelled, including missing payments or failing to give accurate or up-to-date details.
The most common error is falling behind on home maintenance tasks, which just under 4% of policyholders admitted to. Insurers expect properties to be kept in good condition, and can cancel a policy if the home isn’t properly looked after.
Approximately 1.19% didn’t update their insurer about damages to the property, while 1.01% said they didn’t inform them about a change of circumstances, like a new job or occupant. A further 1.15% didn’t tell their insurer about home improvement works, and 0.23% simply didn’t give all the information they should’ve. The same percentage admitted that they’ve missed some payments.
Yet, most of these policyholders know these errors can cause their insurance to be cancelled. Over three-quarters (78%) admit they’ve knowingly done something that could get their policy cancelled, equal to 2.4 million policyholders nationwide.[1] This is despite the fact that it could leave them especially vulnerable if their property suffers any damage. Just under a quarter (22%) didn’t know the consequences of these errors, equal to 693,575 policyholders unaware that their home insurance could be cancelled.
Go.Compare said that having a policy cancelled can also have a long-term financial impact, as some insurers will ask if you’ve had a previous policy cancelled when determining your premium. The comparison site’s figures show that home insurance costs are almost twice as high for those who’ve had a policy cancelled.
The median price paid for combined buildings and contents cover is £230 for those who haven’t had insurance declined in the past, but jumps to £449 for those who have. Similarly, the median for buildings-only cover is £205 for those who haven’t had a previous policy cancelled, but £450 for those who have, while contents-only cover increases from £65 to £133.[3]
Nathan Blackler, home insurance expert at Go.Compare, said: “Insurance policies often require certain conditions to be met to remain valid. So, in some instances, insurers can reject a claim or cancel your policy altogether, and you would have to cover any costs yourself. Yet, many policyholders are knowingly taking this risk. If your policy is cancelled, you’ll likely see higher insurance costs in the future, so it’s critical you do what you can to ensure your cover remains valid. For example, regularly check that all the information is up to date. Every policy is different, so make sure you familiarise yourself with the conditions and exclusions so you’re aware of any restrictions that apply to you. Keep your policy documents safe so that you can check them when you need to, and make a note of the key points if it helps. This way, you can be sure that you know how to keep it valid and avoid any unwanted costs in the future.”
More information about cancelled home insurance policies can be found on Go.Compare’s website.
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