Home insurance premiums rising – despite firms told to offer payment holidays

Home insurance firms have been asked to show compassion during the coronavirus pandemic, but concerns are growing that loyal customers are being made to pay more

home insurance
(Image credit: Getty/PeopleImages)

Home insurance firms have been advised to be lenient during the coronavirus pandemic, as outlined in the latest set of recommendations from the Financial Conduct Authority. 

The FCA guidance makes it very clearly that it expects insurers, including home insurance firms, to behave reasonably towards customers finding it difficult to make repayments due to coronavirus. In fact, the financial regulator is calling for a payment holiday to be applicable 'where appropriate', and especially if its means that the insurance payer will be able to retain an essential insurance product rather than having to cancel it. 

In particular, firms are being urged to perform reassessments for customers who find themselves in financial hardship, with the aim of reducing their monthly premiums. The guidance is very clear on how to views firms who try to use the reassessment process to increase premiums:

'We generally do not expect firms to increase premiums as a result of any reassessment and this is very unlikely to meet our expectations.'

Despite this official guidance, reports are growing about insurance firms doing just that, or raising premiums as a precautionary measure in anticipation of increased claims of accidental damage while people are constantly at home.    

Our advice if this has happened to you? Switch your home insurance provider. You may have to pay to do this if you're in the middle of a contract, but if you've seen your premiums go up dramatically (we've heard of one home owner whose home insurance premiums have just gone up 200 per cent), find an insurer who will treat you fairly and be compassionate. 

Use comparison websites like Confused.com to get you a better deal.

Do I need to tell my insurer that I'm working from home?

In a word, no – unless you are using your home as business premises, e.g. you are keeping stock there, or you have visitors for business purposes (highly unlikely right now anyway). If you're simply working from a laptop, whether as a company employee or as a self-employed freelancer, you don't need to notify your insurer.