First time buyers make insurance mistakes
15/06/2015
Almost half of all first time buyers fail to budget home insurance into their costs when buying a home.
A study by the Co-operative bank shows that due to lack of budgeting, 28% of people who have bought their first home in the last five years have left it uninsured. This works out at £1.5 billion worth of property and contents currently at risk, according to the research.
Of those who did take out home insurance, 13% underestimated the cost of the cover, with one in ten expecting it to cost under £100.
Other common mistakes first time buyers make include not having any content insurance, not arranging insurance until after they had moved all their possessions into their new home and guessing information or answering questions incorrectly when purchasing their quote.
The findings reveal a lack of understanding when it comes to the home buying process, as a third (34%) didn’t know that having buildings insurance in place when they exchanged contracts was a minimum requirement of a mortgage.
Caroline Hunter, Head of Home Insurance at The Co-operative Insurance, said:
“The research highlights not only a widespread confusion among first time buyers of all ages when it comes to assessing the type of home insurance they require for their property, but it also demonstrates that too many individuals have an inadequate level of cover or are leaving themselves exposed by purchasing insurance too late in the buying process, or worse, not at all.
“As many first-time buyers are likely to have previously rented a property, their landlord will have taken care of their buildings insurance and therefore, they may not be aware of their responsibility to have this in place when becoming a home-owner.
“While buying a house is a stressful time, we would urge people not to overlook their buildings and contents insurance and to make sure they provide the right detail when obtaining a quote, as not doing this can invalidate a policy.”
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