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.”
Need financial advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
Have the banks really signed up to the new mortgage rescue plan?
Despite assurances by Gordon Brown in Parliament yesterday there is some confusion as to whether any of the U.K.'s top 12 banks have actually signed up to his mortgage rescue plan which was announced yesterday. A straw poll of the U.K.'s leading banks suggest that many were surprised he commented upon the signing procedure as nobody is aware of the fine print as yet. To suggest that the UK banks h...
Read MoreUK consumers using savings to pay off mortgage
The average Briton has "overpaid" their mortgage arrangement by £3,000 since the recession began in 2007. Despite the fact that many in the UK are now struggling to make ends meet on a monthly basis it seems as though many took a sensible approach as they saw the hard financial times approaching. Ever increasing concern about the security of jobs in the UK, at least in the short-term, would appea...
Read MoreIs your mortgage offering value for money?
Will the government continues its quest to rule the UK financial markets there are ever growing concerns that reductions in base rates and finance costs for banks have yet to be passed on to struggling consumers. Indeed we have seen a number of financial institutions remove mortgage products after the recent interest rate reduction in order to protect their profit margins.
There is...
First-time buyers face £45,000 deposit
20/08/2015 In just 10 years time, first-time buyers may face having to save up £45,000 for a deposit on a house if they have any chance of getting their foot on the housing ladder. Sales and letting company KIS has estimated that the typical North East house will cost £187,000 by 2020; £230,000 by 2025; and £278,000 by 2030. If a general deposit is considered 20%, this would mean buyers...
Read MoreMortgage possession orders up
The number of mortgage possession orders issued in England and Wales rose during the first quarter of this year, official data has shown.In January to March there were 21,931 orders made at county courts, one per cent up from the first three months of 2006.Coming the same day as the government showed a record 30,075 people declared themselves insolvent in the same period, the Department for Consti...
Read More