Charity begins at home insurance

A new charity has set up as an insurance broker with a pledge of giving a big share of any commission earned to good causes.

Care2Save promises to offer home insurance at a competitive price while allowing customers to donate 80% of the commission to a charity of their choice – while 20% goes to Care2Save.

Meanwhile, Care2Save promises to give any money left after running costs to hospice care projects.

The charity earns commission at a rate of 7.5% on home insurance premiums sold to customers for the first 12 months, with the take doubling to 15% in the second year.

To work out how much goes to charity, here’s a table breaking down the latest average home insurance premium costs from the AA and the Care2Save commission:

Type of cover Average premium Care2Save 80% donation
Buildings £203 £12.18
Contents £113 £6.78
Combined £273 £16.38

Although no one likes to rubbish someone trying to work for charity, the Care2Save business model would only seem to work if customers are paying average or less home insurance premiums.

If they pay more, it would seem to make sense to look for cheaper insurance and donate the difference between the price and the average direct to the charity. This amount could then be topped up with Gift Aid, aiding an extra 20% to the donation for basic rate taxpayers.

Gift Aid would make the £16.38 donation for combined home insurance £19.65.

Behind the idea is Andrea Fragata Ladeira, chief of the Care2Save Charitable Trust and commercial director of St Luke’s Hospice, Cheshire: “We are confident it will give people a new way to donate money to charity,” she said. “Initially the site has been launched with insurance products, but this will be expanded over to time to other household utilities, such as energy and broadband.”

Ladeira claims that if 1,000 people sign up to a home and contents insurance policy through the site, around £16,560 will go to the charities picked by the policyholders, while about £4,140 will go to Care2Save.

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