Insurance: hard or soft market, having a homesitter is a good investment
Posted on 18 April, 2016
In the old days, the insurance market gently swung between soft and hard, resulting from the level of claims, capacity and competition. Soft markets tended to mean lower insurance premia; hard markets meant higher premia and (occasionally) insurance cover not available at all.
For many years, insurers (particularly Lloyd’s) have focussed on trying to smooth out the market fluctuations. Most recently, the cycle of hard and soft has at least accelerated, even if it has not disappeared completely. This change is due not least to faster access to more detailed data, improved modelling (forecasting) and greater flexibility and availability of capital.
So how does this affect the consumer? Well, it has considerable bearing on how much you pay each year for your car and home insurance. Most car owners have been surprised (and sometimes dismayed) by the difference in their car insurance premium over the previous year. Motor insurance has been notoriously variable in recent years, and policy holders have found themselves regularly chasing offers and switching insurers annually.
Household insurance (“building and contents”) tends to present a slightly less febrile market place. Where most motor policies offer a straightforward range of cover, household insurance products are less easy to compare; there is less short-term opportunism; there are far more methods of “rating” the risk; and multitudinous variables and exclusions.
One constant is that home insurers will reward policyholders who take better care of their properties.
This is how they identify you as a desirable policyholder –
1. Buying the best insurance product because you care about your home. This in turn means that your insurance premium should be lower per unit of cover. So although the best household policies seem expensive, usually they’re a better bet than the cheaper alternatives – should you have to make a claim.
2. Being prepared to spend a little to make sure your home is not left unoccupied when you’re away. Insurers know very well that most serious claims (burglary, fire and water damage) arise from when the home is left unoccupied. Here’s chapter and verse:
“The most serious characteristic of burglary is that it usually takes place in houses which have been left unoccupied. Of all the burglaries analysed, 80% took place in dwellings where there was nobody in the house at the time. As many as 81% of all daytime burglaries and 94% of all evening burglaries…took place when the house was not occupied.” (Residential Burglary; The Limits of Prevention. Winchester & Jackson, Home Office Research Study No. 74, p.16 )
“…in many cases a burglar will, for example, simply knock on the door of a house to establish whether or not it is occupied.” (Ibid, p.28)
“Householders appear to be particularly at risk when the house has been left empty for several days – for example when a household is away on holiday” (Ibid, p.18)
So regardless of the fluctuations in the market place, your best bet for home insurance is to show the insurer that you’re an exceptionally sensible risk, and buy the best cover available. The insurer will want to keep you as a policyholder and will incentivise you accordingly.
To secure your home while you're away on holiday or business and possibly reduce your insurance premium, call Homesitters to book a homesitter on 01296 630 730 or click here.
NOTES TO EDITORS:
- Homesitters Ltd provides a nationwide live-in home sitting and pet sitting service, available throughout the year.
- Homesitters is endorsed by the leading insurers; they like the company’s significant contribution to risk improvement, particularly with regard to theft and water damage.
- Originally conceived to care for properties and pets while homeowners are away, cover is now provided in a much wider range of scenarios. These include properties awaiting probate/on the market and empty or sparsely furnished properties.
- Homesitters is not an agency. The 1000+ employees are meticulously vetted, personally interviewed and fully insured. They operate under the company’s direction with 24 hour back-up.
- Case studies and images can be provided. Please contact the press office on 01296 630 730
- For full details of the service, visit Homesitters website www.homesitters.co.uk