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When insurance goes from security to scary

When insurance goes from security to scary

For homeowners, home insurance is a safety net, offering peace of mind that their property and belongings are covered, should the worst happen. However, a small accident can quickly become a horror story if your client doesn’t have the right cover.

Nightmare scenarios you can help your clients avoid

If Stephen King was to write a horror story about insurance, it’d start with “sorry, that’s not covered by your policy”. Those few simple words will send a chill through the bones of anyone when calling their insurer. There is a myriad of reasons why a claim will be rejected some of the most common are:

Missed information during the application

During the application process, it’s important that your clients provide 100% accurate information, and disclose anything that could alter what the insurer will cover. If important information is omitted, this could lead to the provider not paying a claim due to non-disclosure. In some instances, it could void the insurance policy altogether – frightening!

Research by Lexis Nexis showed that 70% of people believed it was acceptable to manipulate their insurance application to find a better deal. It’s unnerving to think that many people believe it’s ok to falsify information for a cheaper quote!

Not informing the insurer of changes

It’s not enough to just provide accurate information at the point of sale. It’s also vital for your clients to inform their insurers of any changes to their property during the policy term.

Instances such as:

  • Renovation work which could impact the structure and/or value of the property
  • Changes to periods of unoccupancy
  • Changes to the number of people normally residing at the property

If your client needed to claim but hadn’t notified their insurer of any variations to the information provided at the policy inception, the impact could be grim!


Underinsurance has the potential to be more of a nightmare than that on Elm Street, leaving your client out of pocket.

Contents can easily be underinsured, as there is often a minimum cover value for contents insurance, which policyholders may automatically assume is enough. However, they mustn’t underinsure their possessions and, in particular, they’ll need to declare any high risk and high-value items.

If your client undervalues their contents and needs to claim, the insurer will likely only pay out a percentage of the total value.

The rebuild value is also often incorrectly stated, so it’s important that you and your client consider this carefully and use the tools available, to ensure an accurate figure.

How can you avoid underinsurance?

By providing your clients with clear guidance you can help ensure they have adequate coverage. There are also tools and methods that you can use to help determine accurate cover levels such as:


Use the BICS rebuild calculator, which is fully integrated into the Source quotation platform, to help determine the true rebuild cost.

Look for insurers who use a bedroom based building sum insured, as this will have been carefully calculated based on their years of experience. (And it doesn’t matter whether they sleep in a bed or a coffin!)


Go through each room of their home and estimate the value of all of their belongings. In particular, highlight any high-value items, which will need to be disclosed.

However, it’s important not to over-insure, as they’ll be overpaying for insurance and will never recover those overpayments.

Treat your customers

When customers are unsure of the process, they value expert support and advice, to help them feel that they’ve chosen the right policy for their needs.

To some, insurance can be a minefield. Policies contain a lot of terms (often deemed ‘jargon’) that can easily confuse people and are designed to trick them. However, with your guidance, you can help them see that insurance can be a treat.

Take them through the quote – guide your client through each stage and help them understand the importance of accurate information.

Reassure them of their coverage – once you’ve completed their quotation, go back through the levels of cover they’ve chosen.

Enable them to select their policy – help your client to assemble their product, but with you as their guide.

Answer their questions – your client is bound to have uncertainty around the process, so use your experience to give them confidence.

Talk to your client – your role doesn’t end when the policy goes live. Be sure to diarise your client’s renewal date and reach out to review their coverage every year.

For more tricks and treats on how to use GI to boost your income view our Learning Lab

Lee Denton, Associate Sales Director at Source Insurance