The ‘Why’ Behind Home Insurance

There are several essential stages in the process of finding a home insurance policy. Naturally, you need your client’s home details, personal information, and other fields that must be completed accurately and thoroughly. One important section is the declarations page. If you’re new to GI, then you may be wondering about the significance of your clients’ declarations and why they’re important.

These carefully considered questions are essential for ensuring your clients find the policy that best reflects their situation. Many customers won’t be aware that the answer they give can affect their policy premium, so explain to them the importance of answering honestly.

1 – What’s the property’s rebuild cost?

Many customers may not realise the difference between the rebuild cost and their home’s market valuation. If their home were destroyed, it would be rebuilt based on the cost required to repair it, not on its market value at the time a claim is made. Rebuild costs reflect expenses from the ground up, ranging across materials, labour and fees.

Why do insurers require this declaration?

The simple reason is that underestimating the rebuild cost of a property can lead to underinsurance in the event of a claim, leaving your client uninsured. They may be paying for insurance that doesn’t meet all their needs.

When quoting, our RICS calculator will calculate this for you, which helps to support your quoting. Your clients will then have a rough estimate of their home’s rebuild cost within seconds.

2 – What type of locks are fitted?

According to Screwfix, three of the most common door lock types in the UK are:

Mortice locks (including 5 lever mortice deadlocks)

Key-operated multi-point locking systems

Night latches (also referred to as rim automatic deadlatches and Yale locks)

So, why will insurers ask which lock your client has?

The lock a property possesses is a clear indicator of the building’s security level, which, in turn, allows insurers to assess the level of risk for burglary and will set premiums to match this. Some locks, like a multi-point locking system, will be more secure than a standard Yale lock. In areas with a history of theft claims, locks like these can make a significant difference to a client’s premium price.

By confirming the correct lock type, you help ensure your client’s policy is valid, compliant with insurer requirements, and priced reasonably for their risk level.

3 – Has the property ever suffered from flooding or subsidence?

A property with a history of flooding or subsidence is a property that is a risk to insure. Because of this, it’s always essential to declare if your client’s home has a history of risks such as these.

From an insurer’s perspective, these risks often mean:

Increased likelihood of repeat claims – previous issues can indicate whether a similar problem will happen again.

High repair costs – flooding and subsidence can cause structural damage, require specialist contractors, and often cause irreparable harm to properties.

Potential for hidden or progressive damage – subsidence can develop slowly, leading to long-term settlement issues, with flooding causing structural damage that can’t always be seen.

The Association of British Insurers (ABI) reported 45,000 claims for subsidence in 2024, a sharp rise from 23,000 cases in 2022, as per Zurich.

Historical issues, even if resolved, can result in declined claims or mid-term cancellations of policy. Technology is developing rapidly; however, to ensure properties are assessed on a significantly more targeted basis, allowing homeowners to access more accurate quoting.

4 – Is the property within 400 metres of a watercourse (e.g., river, sea, reservoir, lake)?

Flood risks are a thorn in the side of UK insurers everywhere, making homes hard to insure, especially in months of heavy rainfall. Because of this, properties within a specific vicinity of water bodies will likely experience higher premiums or be unable to obtain a quote.

Technology such as Insurer Hosted Pricing (IHP) and government-backed schemes like Flood Re are fast on the rise, being implemented across the market. These allow insurers to acquire more specific data that accurately assesses a client’s property and whether they’re directly at risk of flooding.

Why do insurers ask this question?

Higher probability of flood-related claims – properties closer to water are statistically more likely to experience flooding.

Severe claim costs – flood damage can affect not only the structure but also electrics, flooring, and personal belongings, with repairs often taking months.

Business continuity risk – in extreme cases, properties may become uninhabitable, increasing temporary accommodation costs.

Risk accumulation – if many homes in one flood-prone area are insured by the same provider, a single flood event could trigger a large volume of claims.

According to the government’s report, ‘National assessment of flood and coastal erosion risk in England 2024’, thetotal properties in areas at risk of flooding from rivers and the sea is around 2.4 million, slightly fewer than their previous assessment.

5 – Is the property a listed building?

Listed properties can be awkward for insurers to protect due to a range of factors. These can include:

• Higher rebuild costs
• Hard-to-attain materials
• Strict planning rules
• Old structures

Because of factors like these, your clients will likely need specialist insurance to cover their home. They will likely experience higher premiums due to the nature of their property.

According to AlexanderJLO Solicitors, there are approximately half a million listed homes in the UK, equating to around 2% of the UK market. It’s essential to identify properties like these early so that you can adapt your client’s cover accordingly.

If you’re unsure of what a listed building is, Historic England states:

“Listed buildings are buildings of special architectural or historic interest with legal protection.”

For listed buildings, Source can accommodate the following:

• Grade 2
• Grade 2*
• Grade B
• Grade B Plus
• Grade B2
• Grade C (S)
• Preservation Order
• Protected

6 – Has the client made any previous home insurance claims?

If your client isn’t a first-time buyer and they have a history of insurance claims, then providers will either charge them more in premiums, or they won’t feel comfortable insuring them. This also applies to ongoing claims.

However, it’s crucial to declare this on behalf of your clients so that they can avoid any disappointments halfway through their policy. If this isn’t stated, and your client’s insurer finds out after the fact, then the insurance will be cancelled.

Your client’s claims history will be logged in the Central Claims Database so that insurers will be aware of their claims history and whether it matches their declarations.

Why Accuracy Matters

Providing correct or complete information prevents misquotes, delays, rejected claims, or cancellations later on in your client’s policy lifespan. Collecting these details efficiently and thoroughly allows you to keep your client’s best interests at heart and builds trust. 

To log in and start quoting home insurance today, visit The Source.

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