Important Small Print Warnings to Homeowners

With the recent spell of cold weather, it would seem that the biggest insurance-related news would concern the risk of freezing pipes, or the dramatic increase of car insurance claims over the past week. The Guardian, however, is warning today of the effect a past conviction can have on your home insurance – and blaming the increase of void policies on the internet.

One of the most important factors is that your home insurance may well be void even if your conviction is considered minor. The case of Michelle Barber shows a gross lack of information: ‘Her home was wrecked by fire in 2007 and she now faces a bill for more than £240,000 because she failed to mention a £150 fine imposed three years earlier for an overpayment of benefits,’ The Guardian reports. She simply was not aware that such a small fine would count, and had even forgotten about it by the time she had taken out her policy.

Similarly, it is important to be aware that admission to past convictions relates to anyone who is living in the house. This includes family members, and even tenants of landlords who may not have felt the need to admit a conviction, or who also may not know the risk to the cover of the property themselves.

The reasons for these increasing problems are twofold. Firstly, when individuals are convicted, the courts do not inform them of the negative affects it could have on their future attempts to take out insurance policies. Secondly, the growing trend for people to shop for their insurance cover on the internet is highlighting that not all of the comparison and insurance websites are as clear about the implications of past convictions as they perhaps should be, and some tend to only offer an ‘assumptions about you’ button that is easily dismissible with the tick of a box.

This backlash against some online insurance sites comes almost immediately after Which? Magazine accused specific sites of offering inaccurate information in regards to insurance and so-called compulsory excesses which make the policy seem cheaper than it is. This, of course, was met with a flurry of responses from companies claiming that they had been lumped in with the bad guys when their own information was presented clearly, and there I am sure that they are justified.

The online insurance marketplace is incredibly varied with good and bad in regards to a number of variables such as usability, price, and information presentation. That said, I also acknowledge that there is a certain lack of fairness when minor convictions that seem to have so little relationship with home insurance can even affect a policy, regardless of the company. And this is certainly an issue that needs to be addressed.