Property insurance – What does non-standard mean anyway?

Ask most people what they think is meant by non-standard home insurance and the chances are you will hear about Thatched roofs or properties that have been flooded and whilst these are viewed as non-standard property risks they are only the tip of the iceberg and the true picture is much more common.

I am going to try and explain why this is now ‘a thing’ and why every broker should know about it and more importantly what they can do to help their clients and at the same time open up an additional lucrative income stream that will help to build embedded value in their business.

Mortgages exist today for a myriad of risks, property type, location, age etc as well as financial and credit worthy-ness of the borrowers, but actually the same situation arises with home insurance, but this is just not talked about as much.

Today, everything it seems is driven by data, you hear terms like big data and data analytics used a lot but what does it really mean? There are an ever-increasing range of products, services and information that is moving to a digital platform and with that comes the ability to combine various different types of data and just like a jigsaw a clearer picture emerges which in the case of insurance companies give them a much better insight into the risks they are covering.

As insurers have been able to get more accurate data, in many cases they are now able to drill down to an individual property at postcode level, they have worked out what risks they don’t want as well as the risks they do want and this has led to a rise in non-standard. Indeed, two similar properties in the same street could conceivably today be charged completely different premiums by the same insurer because of access to more accurate data. There are more than 27 million properties in the UK, and it is estimated that approximately 30% (£7m) fall into the non-standard category estimated to be worth more than £1.5bn GWP annually.

There are four main areas of risk assessment when it comes to property insurance, Property type, which focuses on the  construction of the property, then the location, and or condition of the property, so is it in a high risk area or maybe the property has previously suffered from subsidence or is undergoing renovation work. The third type of risk assessment is usage, for example, is the property used for business purposes or is it partially or fully let or left unoccupied for long periods of time. The last area of risk focusses on the policyholder, do they have a high claims history or poor financial circumstances. All of these will determine whether the risk is a standard vanilla risk or if it falls into one or more of more than 31 different types of non-standard risk.

The good news is that here at Ceta we have developed an easy-to-use online platform that dynamically asks the right questions in order to be able to accurately quote, compare click and buy home insurance for a whole range of non-standard property risks.

Here is a snapshot of the most common non-standard quotes we do...

 Find out more - https://www.ceta.co.uk/infinity/