17 Apr 2019 Insurance customers are increasingly banking on credit to pay premiums with nearly one in three planning to use more credit this year, new research from Premium Credit, the UK’s leading premium finance company shows.

Its nationwide study found 31% of customers will borrow more in 2019 to fund insurance, with rising premiums the biggest reason for increased use of credit. Just 8% believe they will cut back on credit this year.

Around 41% of insurance customers say they are relying on credit more in response to price rises on motor, home, pet, travel and life insurance premiums while one in five (21%) say they need to borrow as their disposable income is being squeezed.

However, 22% say they are using borrowing to spread the cost because the low cost of borrowing makes paying for insurance more affordable.

The bills they face are substantial – more than two out of five (43%) will put more than £500 of insurance premiums on credit with 13% borrowing more than £1,000, the research found.

The most popular form of credit to spread the cost of insurance is credit cards which are being used by 60%. However, 39% plan to use premium finance and pay monthly for insurance rather than in one lump sum.

Worryingly 13% are borrowing from family and 12% are borrowing from friends, while 4% are using high-cost credit including payday loans to ensure they can afford cover.

Premium Credit is warning that using high cost methods of credit is potentially risky and urges customers to consider premium finance; a purpose-built product, which for a small charge enables people to spread the cost of your cover monthly instead of paying for it all in one go.

Adam Morghem, Sfrom Premium Credit said: “The rising cost of insurance is driving increased use of credit to enable people to ensure they can afford the cover they need.
“With nearly one in three customers planning to increase the amount of credit they use to pay for their insurance, we encourage borrowers to ask about the premium finance option, a solution designed for this exact need and means customers are not underinsured and taking unnecessary risks.

“However, it is worrying that customers may be choosing to underinsure or borrow from family or friends- and in some cases rely on high-cost credit including payday loans.”
Its study found drivers are most likely to spread the cost of insurance cover with 84% of motorists using credit as the table below shows.

TYPE OF INSURANCE
NUMBERS BUYING ON CREDIT
Motor
84%
Home
76%
Pet
62%
Travel
57%
Life
45%

Premium Credit is the market leader in the UK and Ireland and the only premium finance provider accredited by BIBA. For more information, please visit: www.premiumcredit.com

15 Apr 2018 Wedding guests shell out over £300 for each wedding they attend, according to new research from home insurer Policy Expert which questioned over 6,000 people in the UK. Nearly half (49%) of people attended a wedding in 2018, meaning that Brits spent more than £8.2 billion1 watching their friends, family and loved ones say ‘I do’.

The summer months prove to be a popular time of year to tie the knot and guests will be totting up a total spend of £327 on gifts, food and drinks, outfits, accommodation and travel. For those lucky enough to enjoy the pre-wedding parties and attend the hen or stag do, the total cost of the wedding increases to £576.

When it comes to picking the perfect gift for the happy couple, the research found 40% of people give cash, 27% stick to the pre-approved gift list and 19% opt to gift money towards the honeymoon. One in five (19%) give gift vouchers and 5% of wedding guests go for a personal touch with a handmade or quirky gift. Wedding goers spend an average of £59 purchasing gifts to celebrate the day but those in the wedding party would be willing to spend £150 to treat the lovebirds.

Adam Powell, COO at Policy Expert comments: “If you or a family member is set to walk down the aisle this summer it’s important to check that gifts received from generous guests, as well as wedding rings and other valuables, are covered in your home insurance policy. While it may not be at the top of the checklist it’s an important consideration. The average gift costs £60, so even a modest wedding could bestow you with hundreds if not thousands of pound worth of presents. Policy Expert offers an additional 10% contents cover the month either side of your wedding as standard, meaning you can cross the threshold on your return from honeymoon without any nasty surprises.”

12 Apr 2019 New research from Direct Line Travel Insurance reveals British Passport holders have collectively lost 567 million days of valid travel since new rules came into effect that stop any remaining time on an old passport being carried over at renewal.  As a result of passport holders renewing before their passports ran out, often because countries demand six months validity to let someone into a country, the equivalent of 155,000 10-year passports have been wasted.

On average, passport holders have 159 days left on their travel document when they renew, or just over five months.  Analysing the money spent buying ‘valid travel time,’ reveals that collectively passport holders have wasted £13.3 million when renewing their documents in just six months. Prior to September 2018, any remaining months (up to nine) on an old passport would be automatically added to a new passport. Now, however, time left on an old passport will not be added to a new one.

Of those who haven’t renewed their passports in the last two years, 1.5 million (five per cent) have less than six months remaining. These people may be in for a nasty surprise if travelling to the Schengen area of Europe in the event of a no deal Brexit, as current travel advice suggests that Schengen countries will require a minimum of six months left on British passports from the date of arrival. This includes countries like France, Italy, Spain and Germany.

Tom Bishop, Head of Travel Insurance at Direct Line commented: “The changes to the time carried over onto new passports have taken many people by surprise.  In many cases a 10-year passport is only useful for nine and a half years as so many countries require six months validity to let someone in.  It is a difficult balancing act, passport holders won’t want to waste remaining time on an old passport by getting a new one too early, but in many cases, holidaymakers will need to ensure they have at least six months validity before travelling.”

27.4 million people (53 per cent of UK adults), are planning a trip to a country that would require more than six months remaining on a passport in the coming year, with over a third (36 per cent) planning to visit a Schengen EU country, where they would need six months passport validity in the event of a no deal Brexit.

Why six months passport validity matters

In the 12 months leading to October 2018 46.3 million trips4 abroad were made by Brits on holiday, of which 77 per cent (35.7 million) were to the Schengen area. Over the last five years, the number of trips made by Britons to the Schengen area on holiday has increased by 7.3 million, or 26 per cent, while there has been a 290,000 increase (six per cent) in trips made to other countries requiring a minimum of six months on a UK passport to enter.

Between October 2017 and October 2018, 5.1 million holidays were made by Brits to non-European countries requiring a minimum of six months on a UK passport to enter, with the USA (2.2 million), Turkey (one million), UAE (560,000), Thailand (305,000) and India (213,000) being the most popular destinations.

Under the new rules in event of a no deal Brexit, nine of the top 10 countries visited by Brits last year will require a minimum of six months validity on a passport.  The Republic of Ireland will be the only destination that does not require six months on British passports to allow entry.Table one: Passport validity for top 10 visited countries by British tourists

Rank Country Number of visits from UK tourists from October 2017-2018 Require six months validity on UK passports
1 Spain 13,824,626 Yes
2 France 5,899,321 Yes
3 Italy 3,044,293 Yes
4 Portugal 2,270,122 Yes
5 USA 2,196,351 Yes
6 Greece 2,194,233 Yes
7 Netherlands 1,604,202 Yes
8 Germany 1,185,145 Yes
9 Irish Republic 1,160,424 No
10 Turkey 1,025,378 Yes

Source: Direct Line Travel Insurance, 2019

Bishop continued: “With the Brexit process and timeline continually changing, the best advice for anyone going on holiday this year is to make sure they have at least six months remaining on their passport. Even just popping over to France on the Eurostar could require six months validity in the event of a no deal Brexit so it’s better to be safe than sorry. It is always sensible to make sure a passport has enough time on it before even booking a holiday, just in case.

“With all the changes happening due to Brexit, it has never been more important to make sure you have a comprehensive travel insurance policy that covers you for any health-related concerns, as EHIC card will not be valid under a no-deal Brexit.”

For a full list of passport rules in relation to Brexit, visit the Government website https://www.gov.uk/guidance/passport-rules-for-travel-to-europe-after-brexit

Other travel changes in the event of a no deal Brexit include:

  • At border control you may need to show a return or onward ticket, show you have enough money for your stay and/or use separate lanes from EU, EEA and Swiss citizens when queuing
  • Your European Health Insurance Card which entitles you to state provided healthcare may not be valid so comprehensive travel insurance becomes even more important
  • If you are taking your vehicle abroad, you will need a green card from your car insurance company, a GB sticker for your car and an International Driving Permit (IDP)
  • If travelling with a pet, contact your vet at least four months beforehand as current EU pet passports will not be valid. A blood test will need to be carried out with results verified by an EU approved laboratory and owners must wait three months from the date of a successful blood sample taken before travelling 

10 Apr 2019

Removing the worry of extra charges makes it that little bit easier for holidaymakers to relax. Here are our eight top tips for using a credit card abroad and making your holiday cash go further. 

1. Select a travel-friendly card

Choose a credit card or prepaid currency card with perks for overseas spending. Start your search by looking at the TotallyMoney travel cards section. A trait of all these cards is that they have lower fees and charges when used abroad, so are ideal for a jetsetter lifestyle. Once you’ve got a travel card, keep it with your passport so it always gets packed and you’re not tempted to use another.

2. Pay in the local currency

Always choose to pay in the local currency rather than pounds sterling. This usually crops up when paying for goods or services using a card machine. Paying in the local currency is usually cheaper, because paying in GBP means the overseas retailer or ATM has to use the local exchange rate to convert the transaction, which tends to work out more expensive than Visa or MasterCard exchange rates. You may hear this referred to as ‘Dynamic Currency Conversion’.

3. Avoid buying or selling currency at the airport

If you need to exchange money, avoid doing it in the airport. Although it’s convenient, it’s also costly. Buying and selling currency at the airport could lose you an extra £10 for every £100 you exchange. Only use airport currency exchanges in absolute emergencies. 

4. Order online to get the best rates

If possible, order you currency ahead of time through an online currency exchange service. These are usually cheaper in terms of exchange fees and it’ll be posted to you. (So that’s one less thing to worry about.) The minimum sum you need to order to avoid additional charges is typically £500-£750.

Defaulting to your bank to buy currency is tempting, but they don’t always have the best deals. Shop around if you can. In fact, supermarkets are often very competitive rates for holiday travel cash — Tesco, Sainsbury’s and Asda, in particular — and will post your currency for free if you order £500 or more. (Below this Tesco and Asda will charge you £3.95 and Sainsbury’s £5.00.)

5. Save on your travel insurance. Arrange in advance.

In the pecking order of ‘what you get excited about before going on holiday’, organising travel insurance is way down the list. Unfortunately, leaving it to the last minute is costly.

To save money and avoid potential disaster, organise your travel insurance as soon as possible after booking your holiday. This way, if you have to cancel your trip for some unforeseen reason, you’re already covered.

6. Don’t be fooled by ‘commission free’ currency deals

Currency advertisements offering ‘commission free’ or ‘fee free’ look tempting. But when it comes to currency conversion, these deals might not be all that great. Why? Even though there are no fees, the exchange rate is poor.

And it’s the exchange rate that’s the critical element when buying foreign currency. That 0.1 or 0.2 on the rate can make a big difference to the amount of foreign currency you get for your money.

Most competitive mainstream currency providers don’t charge a commission fee anyway. Instead, they rely on giving customers an excellent exchange rate to attract business.

7. Book your car hire early to save money

Paying for your overseas car hire on your credit card? Like with insurance and ordering currency online, the earlier you book the cheaper it’s likely to be. What can be £18 per day if booked months ahead could cost £30 per day just before you go. And even more once you arrive at your holiday destination.

8. Be prepared in case you lose your payment cards or Passport

Sun. Beach. Lunchtime cocktails…slipping into holiday-mode is wonderful. But, it can cause us to lose track of our belongings — either because we misplace them or worse, they’re stolen.

Before you travel, make a note of all the relevant contact details and overseas phone numbers for your credit card’s lost and stolen services.

In regards to your passport, it’s good to keep a photocopy that you can keep with your travel documents. Or, if you’re super modern, take a picture and store securely on your phone.


09 Apr 2019 Research
 carried out by financial advice website Moneycomms.co.uk and commented on by credit experts TotallyMoney reveals that certain credit cards used abroad can cost consumers as much as £50-£60 in charges.

This Easter, Britons travelling overseas and hoping to use their credit card to cover holiday spending, are urged to carefully consider which card they pack.

The variation between cards for cash purchases and ATM and transaction fees is staggering. For example, Virgin Money and Creation charge a 5% ATM fee whereas Santander, Halifax and Barclaycard have credit cards that waive it.

Commenting on the findings, Alastair Douglas, CEO of credit experts TotallyMoney said: “With the Easter break fast approaching, many will be looking forward to a bit of time away. But packing the wrong credit card could easily cost a lot more than you anticipate.”

Douglas warns: “Some credit cards are ultra-expensive when used outside the UK, causing havoc with your holiday spending budget, because we’re not just talking about a few pounds. In some cases it can set you back an extra £50 or more.”

To avoid budget-impacting credit card charges, Alastair recommends consumers, “Sign up for a ‘overseas’ credit card, prepaid currency card or Debit Card (if you’re prepared to switch bank account). Keep this dedicated overseas card in a drawer with your passport as your foreign spending card of choice.”

04 Apr 2019 Rising uncertainty is driving a financial flight to safety as savers look for security in the face of worries about living costs, reveals new research from Charter Savings Bank.

Its study shows that more than half of adults have either started to or are considering saving more than in previous years. And it’s 18-30-year olds (71%) who are the most likely to be saving more, whilst 38% of over-75s are also looking to save more than before.

Just over a quarter of British citizens are thinking of cashing in investments such as shares and bonds as they look to reduce risk, with more people turning to fixed-rate savings accounts. Around 44% say they are considering fixed-rate accounts, whilst 38% are willing to sacrifice higher rates for easy access.

Younger savers aged between 18 and 30 are the most likely to open fixed-rate accounts with 55% looking to lock in rates, although 49% are considering easy access accounts and 56% are considering opening a range of savings accounts to have a balance between the two. However, 43% of all adults are looking to increase their savings in a wider mix of accounts to maximise returns and flexibility.

Charter Savings Bank’s Mix & Match ISA could provide such flexibility for savers, enabling them to split their £20,000 ISA allowance across multiple accounts with competitive rates, so they don’t have to choose one type of account over another – they can have the best of multiple worlds.

They can, for example, open an Easy Access Cash ISA with £5,000 and then deposit £10,000 in a 1 Year Fixed Rate Cash ISA product. If they have more money available, they could open a third Cash ISA product using the remaining £5,000 of their annual allowance.

With living costs and economic and political uncertainty all on the rise, more than one in five adults (22%) have been left feeling pessimistic about their finances for the year ahead, and more than one in ten (11%) of 51-60 year olds say they are considering pushing back their retirement date.

It’s day-to-day costs which are worrying people the most, with nearly three quarters of adults naming rising energy bills (73%) or rising food costs (72%) as a financial concern for the year ahead.

However, rising political uncertainty is the primary financial concern for young people, with over three quarters of 18-30-year olds (77%) worried about what political changes in 2019 might mean for their finances.

People’s biggest financial concerns for 2019

Financial concerns How many are worried about this?
Rising energy bills 73%
Rising food costs 72%
Political uncertainty 66%
Rising inflation 63%
Economic uncertainty 61%
Interest rate rises 43%
Currency markets 38%
House prices 34%
Stock market volatility 33%

Paul Whitlock, Executive Director, Charter Savings Bank says: “Uncertainty seems to be a way of life currently, with political and economic concerns rising in tandem with living costs.

“It’s reassuring to see so many people, particularly young people, taking their savings seriously in such a volatile climate. With even small amounts of money growing over time, saving from an early age is a great way to ensure financial resilience.

“Though savers are increasingly looking for safety, it can be difficult to decide on the right home for your cash and whether to lock in rates or opt for the flexibility of easy access.”

01 Apr 2019 From today, millions of households will be met with additional squeezes on disposable income. With Sky customers facing paying up to £84 a year more for bundles including broadband, TV and phone from April 1st .

Alistair Thom, Managing Director for free to air satellite TV provider, Freesat said: “Worryingly, homeowners with expensive TV and broadband subscriptions are facing yet another price hike come April 1st.

In this time of economic uncertainty, the impact of hefty monthly bills, long contract terms and steep early termination charges is unignorable. With people’s finances already being squeezed – more needs to be done to ensure customers assess whether their TV subscription is really up to scratch.

Whether they are signed up to pay-TV or not, we know that 95% of the most watched programmes are available free to air. This begs the question why more aren’t taking action to switch to a free service, saving money without having to change their viewing habits in the process.

Freesat customers aren’t required to sign any contract or set up a subscription. As long as you have a satellite dish, you can access a great selection of live TV and On Demand players including BBC iPlayer, ITV Hub and YouTube with a single set-top box purchase, without sacrificing on the quality of entertainment provided.

Viewers can enjoy all of the box-sets and movies they love via optional streaming services like Netflix and Rakuten TV without spending a fortune, and free from the burden of long-term contracts and unexpected price hikes.”

28 Mar 2019 The entrepreneurial dream is alive and well in the UK reveals new research collated by Direct Line for Business . Some 5.3 million people (10 per cent) dream of becoming their own boss in the future, embracing a career as a freelancer.  This is in addition to the 8.6 million (16 per cent) who currently freelance and are either fulltime self-employed or carry out contract work alongside their main jobs.  A further one in eight (12 per cent) Brits have previously freelanced.

Breaking into freelance work is something many people will only consider if they have a nest egg saved up, especially if an initial contract or client hasn’t been secured.  Overall, 71 per cent of self-employed workers saved up money before going freelance, leaving a plucky 29 per cent who admitted that they had nothing saved before starting their business.

The average freelancer saves up £16,000 before setting up their own enterprise, a significant chunk of money and the equivalent of 70 per cent of the annual salary in the UK .  Most do this to allow for potential shortfalls in monthly income (43 per cent), to ensure they have funds to purchase essential business goods (34 per cent) and to build up a fund for holidays or sick leave (16 per cent). For more than two thirds (69 per cent) of the self-employed people who saved up money before going freelance, this money was enough to meet their needs. This should all be encouraging news for the one in 10 Brits (5.3 million people) who have never been self-employed but dream of one day setting up their own business.

It isn’t just money that needs to be considered by prospective freelancers before leaving full time employment, as they will be taking sole responsibility for tax and legal issues.  On average, self-employed workers spend seven months and three weeks preparing to go freelance. The majority (73 per cent) spend time preparing to become self-employed, whether that is by reading up on tax implications (27 per cent) or identifying target markets and audiences (25 per cent).  However, nearly one in three (30 per cent) spend less than a month getting ready to go it alone.

Jazz Gakhal, Managing Director at Direct Line for Business said: “Going freelance is an exciting prospect, with the idea of becoming your own boss extremely tempting. There are pros and cons, of course, as independent contractors can often earn more by charging day rates, but don’t benefit from paid holiday, pensions and sick leave. Any budding entrepreneur should consider the value of these additional benefits as well as any change in salary before making the leap.”

Dealing with tax issues is one of the biggest concerns for freelancers before setting up shop, with a third (33 per cent) seeing this as a major hurdle for going it alone. Other issues include not getting paid when on holiday and being able to meet existing financial commitments (both 26 per cent). One in five (20 per cent) worries about marketing and bringing in new clients and the same amount again about  not being able to save for a pension (19 per cent).

Table one: Concerns for potential freelancers

Top concerns for freelancers Percentage who list this concern
Dealing with tax issues 33%
Not getting paid when on holiday 26%
Being unable to meet existing financial commitments 26%
Marketing and bringing in new clients 20%
Not saving for a pension 19%

Source: Direct Line for Business, 2018

Jazz Gakhal, Managing Director at Direct Line for Business said: “If you do provide a professional service to clients, either as a contractor or freelancer, it’s important to have the right insurance in place. Direct Line for Business offers flexible insurance that can be personalised to reflect the ever-changing needs of your business, so you don’t have to take out a new policy every time your role, premises or revenue changes, which saves time and hassle. In addition, we don’t charge admin fees to make mid term changes to your policy.

For more information about Direct Line’s small business insurance for contractors and freelancers visit the website: https://www.directlineforbusiness.co.uk/small-business-insurance/contractors-and-freelancers

26 Mar 2019 The bill to the UK motorist for repairing pothole damage has skyrocketed to a total of more than £1billion, reveals research published today by Kwik Fit1, the UK’s largest automotive servicing and repair company. With more than 11 million drivers damaging their vehicle due to poor road conditions over the last year, the cost has reached a staggering £1.21billion – an increase of £296million2 (32%) compared to the year before. 

This is continuing a worrying trend – in the year ending March 2016, the equivalent total bill was £684million3, meaning that the cost of damage reported by motorists has risen by 77% in just three years.

The average cost to the individual motorist of repairing damage to components such as tyres, suspension and wheels has reduced slightly from £111 to £108.86, however, the number of motorists being affected has jumped by 2.9 million since last year. And the total cost is likely to rise even further as 1.4 million drivers say they have yet to have their vehicle repaired.

Almost a third of drivers who have hit a pothole in the last year had their car damaged by the impact, with the most common repairs being to tyres (5.9 million), suspension (3.8 million), wheels (3.7 million), steering (1.7 million), bodywork (1.3 million) and exhaust (1.2 million). 17% of motorists estimate they hit more than 30 potholes over the course of just one month – an average of one a day.

Regionally, Londoners’ wallets are being hit the hardest with an overall bill of £204,681,600, while in Wales the cost to motorists stands at £20,417,100 – a difference of £184,264,500.

Source: Research for Kwik Fit 2019

More than half (51%) of people travelling on UK roads believe they are worse now compared to a year ago, with 60% saying they are in a poorer state when compared to 5 years ago. This mirrors the annual ALARM report4 published today by the Asphalt Industry Alliance which states while a 20% increase in funds for road networks is welcome and will halt further decline, the one-off catch-up cost to fix UK roads will only continue to rise.

The ALARM report also reveals that just £6.9million has been paid by local authorities to compensate those affected by potholes despite the bill to motorists topping more than £1billion. This is reflected in Kwik Fit’s research as it found less than a quarter (24%) of people have complained about potholes in their local area to their council.

Roger Griggs, Communications Director at Kwik Fit, said: “The cost of damage from potholes is hitting more and more drivers who are continuing to see their cash being spent on issues that are not entirely their fault. Fortunately, this winter has not been as harsh as it has been in recent years, however as we know with the Great British weather, conditions which would further damage our road network could still be round the corner.

“It is worth noting that damage isn’t always immediately noticeable so motorists should give their car a thorough check when they do hit a pothole. Damage can also often be internal so anyone concerned about their car can take it to one of our centres so the staff can put it on the ramp for closer inspection.”

For the latest news and updates from Kwik Fit, customers can also follow the company on Twitter at @kwik_fit.

21 Mar 2019 A new report on the UK property insurance industry, has found that the insurance needs of around one million short-term letting hosts are not being adequately accommodated by the UK’s major insurers. They are either being excluded from, compromised by or voided from their existing insurance policies.

The report – Insurance in the sharing economy – 2019 property focus – published by sharing economy insurance specialist Pikl, is the first in-depth study of its kind on the attitudes of the UK’s major insurance providers towards the sharing economy. Pikl unearthed a number of serious issues where short-term letting hosts are being neglected by the industry:

  • Appropriate cover for short term letting is virtually non-existent

It is not included as standard with any of the insurers who participated in the report.

  • Many insurers will void or cancel existing policies if a customer is involved in short-term letting

More than a third of insurers (accounting for 39% of UK property GWP) said they would void and then cancel a customer’s policy if the customer declared that they wanted to use their property for short-term letting.

  • Where cover is available, it’s only for a short period and severe exclusions are imposed

Half the insurers (accounting for 54% of UK property GWP) said they would allow cover to remain active (usually for no more than 30 days) but would impose exclusions on their policies in regard to guests of short term letting; most commonly for theft, malicious damage and legal expenses. Other exclusions include accidental damage and legal liability.

  • Insurers are keeping customers in the dark about their obligations

Insurers are not, as a rule, informing customers that they need to tell them if they are short-term letting. A huge majority of insurers (accounting for 86% of UK property GWP) admitted that they do not take any steps to inform their customers about the need to declare it. In fact, none of the insurers include a question in their question set! However, 100% of insurers said that they expect customers to inform them if they are short-term letting.

  • Insurers may not pay out on a short term letting related claim, if this activity was only discovered at the point of claim

Most insurers (accounting for 80% of UK property GWP) said they may not pay out on a claim related to short term letting if it was discovered at the point of claim and the customer had not disclosed this information.

Louise Birritteri, CEO of Pikl said, “Our study is the first to establish how the UK’s major insurers treat customers who participate in the sharing economy and short-term letting market. It was refreshing that so many insurance companies were happy to participate as it shows they are taking this issue seriously and recognise some of the shortfalls in both the cover they offer and their communications. But it does highlight the gaping hole of awareness that exists around this topic.


  • Appropriate cover for short term letting is virtually non-existent

It is not included as standard with any of the insurers who participated in the report.

  • Many insurers will void or cancel existing policies if a customer is involved in short-term letting

More than a third of insurers (accounting for 39% of UK property GWP) said they would void and then cancel a customer’s policy if the customer declared that they wanted to use their property for short-term letting.

  • Where cover is available, it’s only for a short period and severe exclusions are imposed

Half the insurers (accounting for 54% of UK property GWP) said they would allow cover to remain active (usually for no more than 30 days) but would impose exclusions on their policies in regard to guests of short term letting; most commonly for theft, malicious damage and legal expenses. Other exclusions include accidental damage and legal liability.

  • Insurers are keeping customers in the dark about their obligations

Insurers are not, as a rule, informing customers that they need to tell them if they are short-term letting. A huge majority of insurers (accounting for 86% of UK property GWP) admitted that they do not take any steps to inform their customers about the need to declare it. In fact, none of the insurers include a question in their question set! However, 100% of insurers said that they expect customers to inform them if they are short-term letting.

  • Insurers may not pay out on a short term letting related claim, if this activity was only discovered at the point of claim

Most insurers (accounting for 80% of UK property GWP) said they may not pay out on a claim related to short term letting if it was discovered at the point of claim and the customer had not disclosed this information.

  • Insurers split over landlord cover

Half of the insurers said they would provide cover for landlords who engaged in short-term letting if they were informed by the policyholder, but sub-letting by tenants will more than likely lead to a policy cancellation.

  • Insurers recognise they ‘must do better

Less than a third of insurers (accounting for 29% of UK property GWP) were completely satisfied with their current approach to, and processes for, the short term-letting market. It was the same for the customer questions in their question sets and their policy wording.

“There is a false expectation from hosts that their standard home insurance policy will cover them when in fact it’s unlikely that it will and they will need specialist cover. But there’s a scarcity of appropriate cover currently available. Combine that with the lack of clarity over customers’ responsibilities to inform their insurer, the absence of proactive communications from insurance companies and comparison sites and the misperceptions about platforms like Airbnb’s own guarantee, and you find that many hosts fall into a ‘void of no cover’ and are at risk of financial loss through no real fault of their own.

“To address this situation, we are working in collaboration with many of the large insurance companies to ensure that people who want to earn money through short-term lettings are protected. We have launched a range of specialist insurance products to cater specifically for them that are designed to run alongside standard home and landlord policies on offer from any insurance provider. These products are available to the insurance broker market.  We will also soon be providing all-inclusive plans in collaboration with a panel of insurers from our website. It’ll mean that the generation of Airbnb-ers can now get the best of both worlds from one place. In Pikl they’ll have a brand that understands the sharing economy and can provide the specialist cover they have been struggling to find, as well as providing the best deals for their standard household insurance”

Download the full report at http://pikl.com/sharing-economy-insurance-report