Home insurance customers missing out on huge savings

Sainsbury's Finance issued a challenge to the home insurance market as new research revealed that home insurers continue to lag behind car insurers in terms of rewarding customers with no-claims discounts.

The findings, commissioned by Sainsbury's Home Insurance, reveal that while almost all car insurance policies offer a no-claims discount, one in four (26%) of home insurance policies don't, leaving customers missing out on potentially huge savings. Furthermore, of those home insurers that do offer it, 8% penalise customers for making a claim by removing more than one year of no-claims discount, even if they have built up several years no-claims discount.

Sainsbury's Finance, whose home insurance offers up to 30% no-claims discount as standard and a further saving if you choose to purchase no-claims discount protection, believes that many insurers are treating their customers unfairly, because their home insurance customers are losing out on potentially huge savings on their premiums. Also, if homeowners do make a claim, their premiums may rise dramatically because they have not built up a no-claims discount, which can reduce the impact of any increase.

The research also shows that, of those home insurance policies that offer a no-claims discount, 74% provide no details on how they work, making it very difficult for customers to understand their position.

Neil Laird, Home Insurance Manager for Sainsbury's, explains: "A no-claims discount can significantly reduce your premiums. For example, after five years of no claims, our customers could benefit from a discount of up to 30%. We don't see any reason why insurers should offer no-claims discounts on their motor insurance policies but not on their home insurance, and it is alarming that so many providers are not being upfront and transparent about their no claims provision.

"While a no-claims discount won't necessarily stop premiums going up the next year, it can provide a significant saving and can soften the impact of any unrelated rise in premiums after a claim so it's worthwhile shopping around for a policy that allows you to earn the discount."