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Daily Insurance Industry News
Sunday 21st of January 2018
October 27, 2010

Cheap home insurance could be costly

by Richard Kilner

Story link: Cheap home insurance could be costly

Home insurance that appears to be relatively cheap could in fact be far costlier, according to independent financial research company Defaqto.

Defaqto has discovered that many home insurance policies now offer a larger range of optional extras, instead of including them as standard.

Homeowners, keen particularly in a challenging economic environment to save money, may therefore be opting for the cheapest policy but miss out on certain features and could risk underinsuring their home.

General Insurance Insight Analyst Mike Powell has cited the rise of price comparison websites as one of the key drivers in the move to price-focused rather than coverage-focused purchasing.

Powell added that the insurance sector was responding to current conditions by making policies more affordable, at the cost of reducing the level of standardised coverage.

Powell urged consumers to consider coverage as well as cost when browsing for home insurance so that sufficient protection is acquired.

Last week Defaqto revealed that in the last six years the number of home insurers had increased by 73%, moving the market to a more tailored approach rather than a standardised, one size fits all approach.

 

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