Nation overlooking £5 billion in easy insurance pickings

insurance savingsThere’s a well-known saying in healthcare circles that ‘prevention is better than cure’, but could the same be applied to financial circles and what would it mean for insurance? It’s exactly the question that’s been bothering one provider and they have come to some surprising conclusions.
Research by a leading insurer has revealed the average household could save over £200 a year by taking preventative measures to reduce the risk of making car and home insurance claims. Crunch the numbers and that means the nation is missing out on over £5.5 billion in insurance savings every year.

The insurance industry pays out £15 billion a year in car and home claims, and simple steps could cut the overall bill by over a third. By far the biggest proportion of claims are for car insurance and improved vehicle safety (such as fitting vehicles with Autonomous Emergency Braking systems) could add-up to savings of £1.5 billion. With AEB being fitted as standard in a large proportion of new cars we are likely to see premiums fall.

On a more practical level there’s plenty we can do to help cut the cost of home insurance claims. Common sense security measures, such as leaving spare keys with trusted friends rather than under the doormat, could cut claims by at least £200 million. We’ve previously posted Ten Tips to Beat the Burglars and the best bit is that most of them won’t cost you a single penny.

When it comes to home insurance claims a little DIY and a little TLC can go a long way. Experts estimate that homeowners could save nearly £400 million on water damage claims by fixing leaky taps and making sure pipes don’t freeze in the winter months. Out in the garden some judicious pruning of problem trees could cut £216 million off the annual bill for damage to household foundations.

As a nation we probably had a gut feeling that there were savings to be made, but it seems we are reluctant to do anything about. A survey of 2000 adults revealed there was a disconnect between perceived cost and real benefit. Put another way: while most respondents were aware of the situation; few would do anything to change it.

However, it’s worth noting that many of the preventive measures are quick, easy and cost effective. It’s understandable that homeowners may not want to spend thousands of pounds on a swanky security system, but many could make serious savings by fitting approved locks to doors and windows and investing in a smoke alarm.

Improving car and home security isn’t just about saving money on claims, losing prized possessions can be traumatic. Plus there’s the bother of making a claim, the cost of claims excess, the possible loss of any No Claims Discount and the likelihood of higher premiums next year.

The fact that providers pay out £15 billion a year shows that insurance provides an invaluable safety net, but by taking a few preventative steps you might not need a financial cure.



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