Inadequate insurance is a waste of money, says Santander

Taking out home insurance that will never pay out to cover a claim is a waste of money, according to a bank.

A new survey looking at how homeowners buy buildings and contents insurance by Santander has uncovered some staggering statistics:

  • 60% of homeowners have suffered accidental damage or theft
  • 40% did not have adequate cover and had to find £200 or more out of their own pocket to cover the cost
  • 60% of homeowners failed to read their insurance policy
  • 25% buy the cheapest home insurance policy regardless of the cover provided

The bank says many homeowners pay out for cheap buildings and contents insurance that fails to pay out enough to cover the true cost in four out of 10 claims.

The most common claims dealt with by the bank’s underwriters included damage to carpets, rugs or upholstery – reported by 40% of homeowners.

Just over 20% have had TVs and DVDs harmed or stolen, and 19% accidentally ruined their furniture.

Loss or damage to gadgets like iPads, tablet computers and phones outside the home was reported in 9% of claims another 9% have lost or damaged camcorders, camera or sports equipment.

Adults cause the most damage – confessing to around 30% of claims, while children are blamed for 11% and thieves for 29%.

Although those with inadequate insurance paid out an average £200 as a result, a fifth of them ended up paying more than £500 because their home insurance failed to do the job.

The 47% of homeowners admitted skimming through their insurance policy without understanding the details, while 10% did not bother looking at the policy booklet.

Bank spokesman Colin Greenhill said:  “While customers obviously want good value from their home insurance, the best value policy is the one that actually provides comprehensive cover when things go wrong.”

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3 Responses to Inadequate insurance is a waste of money, says Santander

  1. The only reason to buy home insurance is to cover the risk on your property and contents. If you buy a policy that does not cover everything at risk then you must be prepared to pay the difference in the event of a claim and that is less than ideal. The difference in insurance price from £30,000 – £50,000 contents cover is minimal and well worth putting in place – don’t cut corners and use the insurance as it is intended – to protect you against complete loss.

  2. I agree with Jason, i really do not understand for the sake of a small difference in premium from say £20,000 to £40,000 in additional cover why people do not eliminate all risk on a claim. It makes no sense.

  3. Steve says:

    Santander have refused to pay out anything on my Personal injury insurance even though i have amputated my right hand index and middle fingers to the middle knucke as they say i still have use of whats left! Why pay for a personal injury insurance that don’t pay out if you have a personal injury ?

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