Two thirds of people don’t know what they would pay when making a home insurance claim

New data from Go.Compare home insurance has revealed that the majority of people don’t know their current home insurance excesses – even though this crucial part of their policy decides what consumers have to pay in the event of a claim.

The new research reveals that just 4 in 10 people (40%) are aware of their voluntary excess, and only a third (36%) know their compulsory excess. Additionally, just over a fifth of people (21%) admit to being clueless about both their voluntary and compulsory excess.*

As well as missing out on this all-important information, it seems there’s confusion about the terms themselves – with only half of those surveyed (52%) saying they fully understood what the terms ‘voluntary excess’ and ‘compulsory excess’ meant in relation to their insurance policies.

An insurance excess is made up of two parts – a voluntary excess and compulsory excess. The voluntary excess is an amount that you can set when you are searching for a quote - this can be as low as zero and traditionally reduces how much you’ll need to pay when you make a claim. Alternatively, you can increase the voluntary excess so that you’ll pay this on top of your compulsory excess, which may reduce your premium.

Compulsory excess is the amount set by your home insurance provider and is non-negotiable. Depending on the insurer, this amount can be as low as £50. But for issues that are usually expensive to repair or resolve, the excess for these could be much higher.

In addition, the research revealed that phrases ‘sum insured’ (45%), ‘additional excess’ (41%) and ‘underinsured’ (32%) were policy holders’ three least-understood terms.

Go.Compare’s Home Insurance spokesperson, Ceri McMillan said, “Understanding your home insurance policy is extremely important, and the excesses outlined in your policy can have a big impact in the event you have to make a claim, so it’s worth paying close attention to these before making a commitment.

“An excess is essentially the amount you will have to pay towards any claim you make – so the higher your excesses, the higher the potential bill you may face when you are claiming.

“While choosing higher excesses may lower the cost of your home insurance policy, it is vital you make sure they will be affordable for you in the event of a claim.”

Go.Compare’s data also suggests that more than a quarter (28%) of people said that increasing instances of extreme weather – such as record temperatures, storms and flash floods – is making them look more closely at their cover, suggesting home insurance is growing in importance for some.

Ceri McMillan added, “Depending on your policy, home insurance can cover your home and its contents from a variety of damage, due to things like fires, flooding, storms, and theft.

“In the event of a claim, it may cover the costs of any repairs or replacements needed, but your specific cover will depend on your individual policy – so it is important to check the fine print and be aware of how far your cover extends, as well as how much it might cost you to make a claim.

“Go.Compare is currently offering £250 free excess cover when you buy home insurance, so remember to factor this into your excesses when you get your new policy.”

For more information about Go.Compare’s excess refund reward, click here: https://www.gocompare.com/home-insurance/free-excess-protection-cover/.

For more information on home contents and buildings insurance, please visit: https://www.gocompare.com/home-insurance/.

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