Policyholders to check with insurers about working from home cover

Home and contents policyholders have been encouraged to check their insurer will cover them for working at home for the rest of 2020. 

As the Government encourages more people to head back to the office, this could possibly lead to dispute between insurers and policyholders, according to insurer, Urban Jungle.  

This is despite the fact that office-based workers who continue to work from home, due to the coronavirus pandemic, have been advised they will not need to contact their insurance firm to inform them of their change in circumstance.

Meanwhile, data from a comparison website suggest that coronavirus lockdown has caused home cover costs to increase – and could continue to rise in the coming years. 

The ABI said policyholders shouldn't need to inform insurers about changes in circumstance

The ABI said policyholders shouldn't need to inform insurers about changes in circumstance

The ABI said policyholders shouldn’t need to inform insurers about changes in circumstance

It was decided by the Association of British Insurers at the beginning of the crisis that policyholders should not need to contact their insurer to update or extend their cover arrangements.

This was reviewed at the end of August and the changes will remain in place until at least 31 October, when they will be reviewed again.  

As part of the changes, home insurance policies would not need to be changed as more people had to work from home, and their cover would not be affected by the changes.

For those who have to drive to their workplace because of the impact of Covid-19, their insurance policy will also not be affected.

Mark Shepherd, ABI assistant director and head of general insurance policy, said: ‘Insurers are committed to helping customers throughout these challenging times.

‘If you are an office-based worker who is working from home or an employee driving to your workplace because of the pandemic you are covered.

‘The insurance industry plays a vital role as a final safety net for customers and the extension of these customer pledges demonstrates the industry’s commitment to supporting those impacted by the crisis.’

The home and motor pledges were reviewed on 1 September 2020 and will remain in place until 31 October, at which point they will be reviewed again.

Home working became the norm this year, with figures from the Office for National Statistics showing nearly half of the UK’s 32million strong workforce worked from home during lockdown. 

However, insurance customers have also been warned that there are likely to be disputes pitting the self-employed and homeworkers against the insurance industry if, when reviewed, customers must inform their insurers they are working from home.

Home insurance is meant to cover those currently working from home due to the pandemic

Home insurance is meant to cover those currently working from home due to the pandemic

Home insurance is meant to cover those currently working from home due to the pandemic

As government guidance has also changed – it now encourages people to go back to their place of work – it may be easier for insurers to draw a distinction between home and the office.

Jimmy Williams, of insurer Urban Jungle, said: ‘Some insurers aren’t being very flexible and are insisting that domestic policies don’t cover incidents if people are working from home or if they are running a business. 

‘So, if you spill tea on your laptop while writing a work email, they might say: ‘you’re not covered’.

‘When lockdown was in place, it would have been harder for insurers to draw a distinction between the office and home. But now, government guidance is different, it is easier for them to do so.

‘We don’t think this is right as so many people are now working from home, either because going to the office doesn’t feel safe or because they are freelancing.’

As such, customers are encouraged to check with their insurer directly to ensure they will be covered should anything go wrong in the home. 

This is Money asked other insurers if they plan to cover home workers after 31 October. 

LV= is one such insurer that has assured its home insurance customers that their policies automatically cover them for working from home even after the review takes place at the end of next month. 

As standard, all home insurance policies with LV= automatically insure customers who are either choosing to work from home or have been made to do so.

Office equipment owned by customers, such as desks, printers and chairs, are covered as standard and anyone running a business from home and doing clerical work should also be covered.

Any equipment provided by their employer, such as laptops, monitors and chairs isn’t covered, but this should be insured by the company.  

Heather Smith, Managing Director of LV= GI Direct, said: ‘Through Covid-19, many people have found themselves having to work from home and even though lockdown restrictions are easing some are realising that they would much prefer to continue working this way in the future, irrespective of what happens with Covid-19.

‘Our customers have always been covered for working from home as standard and this will remain the case, even after the 31 October when the pledge by the ABI is reviewed.’   

A Direct Line spokesperson said: ‘Customers are covered under their home insurance policy to work from home, as long as their work is of a clerical nature, such as using a phone or laptop. Customers do not need to notify us of this change in working pattern.

‘However, if individuals are working from home and are doing a role that isn’t clerical in nature, or indeed are likely to have an increased number of visitors to their home on business matters, they should call us to see if cover is available and to make any necessary changes to their policy.’

Meanwhile, Aviva said its policies cover individuals carrying out administration work from home as standard and this would not be classed as business use. 

On this basis, there would be no need for customers to contact Aviva to inform it that they’re working from home. 

A spokesperson for Admiral added: ‘Customers who are normally office based but are doing clerical work at home, currently don’t have to inform us. 

‘We are reviewing our processes beyond October and this will allow for changing working arrangements whereby the home becomes the primary place of work for many people.’

Customers are encouraged to check they are covered for working from home with their insurer

Customers are encouraged to check they are covered for working from home with their insurer

Customers are encouraged to check they are covered for working from home with their insurer

Homeowners paying highest rates for insurance 

Homeowners are paying the highest rates for combined content and building insurance since 2013, with the upward trend continuing through lockdown, according to new research by MoneySupermarket.

Based on more than seven years of data and millions of home insurance customer quotes, the research shows that the average combined home insurance cost now stands at £146.72 – the highest since 2013 where prices peaked at £154.43.

Some areas of the country even exceeded 2013 costs during the lockdown months of April, May and June 2020, with 21 areas witnessing the highest premiums ever.

Guernsey’s costs are the most expensive of these, rising 16 per cent since 2019 to over £250 per month.

Combined home insurance costs are 29 per cent higher in July 2020, at an average of £146.20, than they were in early 2017 when they were at their lowest at £113.30.

Premiums also rose by 4.16 per cent nationwide over the past year and 2.08 per cent between March and July 2020.

Looking at buildings-only insurance, the lockdown months of April, May and June saw the highest average premiums ever recorded by MoneySupermarket at £112.59.

This trend was clearly visible across the UK, with 46 per cent of all areas recording their highest ever buildings-only premium. 

Kate Devine, head of home insurance at MoneySupermarket, said: ‘There are several possible drivers behind the continuing rise in premiums. Covid-19 lockdown – which ran from 23 March until restrictions started to ease in June – may have played a part. 

‘With many people remaining constantly at home – schooling, working and even exercising – the rate of accidental damage becomes significantly higher, and more claims spell higher costs for insurers.

‘In the coming months, as the nation maneuvers the recession, it’s likely the home insurance costs will fluctuate. 

‘For example, the government’s stamp duty break is encouraging a spike in home moves, which could potentially cause a subsequent impact on home insurance costs.’ 

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