2012 is “year of risk” for UK households warns AXA

AXA, one of the UK’s largest home insurers, is warning Brits to take extra care in 2012 as a combination of factors could make it one of the worst on record for home insurance claims.

1 January 2012

Posted in Product

by Daniel O’Byrne (see media contact)

The company is predicting that in 2012, the mix of an unprecedented number of events this summer (Olympics, Diamond Jubilee and Euro 2012), continuing economic pressures and ongoing 'drought' and unusual weather conditions could add up to soaring numbers of home claims.

  • Claims data shows that whenever family and friends get together in the home the risk of loss or damage increases by up to 78%
  • Stats also show that when many people leave their homes to attend events thefts can increase by up to 24%
  • 'Drought' conditions of autumn could be the start of a surge in subsidence
  • Meanwhile another cold snap could catch out the 50%+ who have still taken no precautions to protect against cold weather
  • Economic pressures have seen theft and attempted theft claims rise - 12% up in 2010 and stats so far for 2011 suggest that this has continued
  • Homeowners looking to save money on home maintenance could find this leaves their insurance invalid.

Events

Claims data from AXA shows that whenever family and friends get together the number of accidental damage and losses increases - for example Christmas Day last year saw a jump of 14% in losses while New Year's Day a 78% increase. With almost half of us (49%) planning some sort of get together for the Olympics, a similar number to watch Euro 2012 and 40% looking at celebrating the Diamond Jubilee that could mean a lot of accidents around the home.

Meanwhile, the canny burglar is well aware of the fact that certain days of the year mean people will be out of their homes or taking careless risks. New Year's Eve last year saw a 9% rise in thefts or attempted thefts while August Bank holiday saw a 24% increase in theft. And while only 9% of people are likely to be heading to the Olympics and 6% to the Diamond Jubilee and 4% to Euro 2012, 34% of these will alert potential burglars to the fact they will be out of their homes by talking about it on social networking sites. And among those staying at home to enjoy the occasion, 61% will leave doors open for friends (and any opportunistic thief) to come and go as they please.

Added to this is the concern that police forces outside of London will be stretched during the Olympic period - something half of us are concerned about and which will doubtless have been noted by potential housebreakers.

An additional risk factor for those in London is the renting out of homes or rooms to Olympic visitors. Around 12% of Londoners are thinking of doing this yet many won't put the correct insurance in place for tenanted property - only half (53%) were aware that their existing insurance may not be sufficient.

The weather

The UK's weather has thrown up plenty of problems for homeowners in the last couple of years and 2012 could be set to continue the same way.

The cold winters of 2010 and 2011 saw a 50% rise in burst pipe claims and another cold snap in 2012 could produce similar results as people continue to fail to take precautions - only 42% insulate pipes and 45% leave heating on low when going out in freezing weather.

But even without the extreme cold, AXA warns that the continued 'drought' conditions of the last few months could lead to a huge rise in subsidence for homeowners in 2012. Water companies are already issuing warnings and the end of 2011 saw some of the warmest and driest weather on record.

The economy

Continuing pressure on personal finances means a rise in claims is almost inevitable.
Statistics from AXA home insurance show that the numbers of household thefts rise in times of economic hardship and the company has seen growing evidence of this recently. Figures from the company show theft or attempted theft numbers are up 12% from 2009 to 2010 and this trend looks as if it will have continued throughout 2011 - certainly the early months where all claims data is available shows a rise.

Added to this, many less honest people will make false or exaggerated claims to try and get a bit of extra cash. Research carried out among insurance brokers in 2010 revealed that one in three were seeing higher levels of exaggerated claims than in 2009.

And homeowners may try to cut corners by cutting down on maintenance around the home which could in itself lead to additional claims. Although AXA home insurance warns that this can be a false economy because if a lack of repair is the cause of a claim it can be declined.

Christine Matthews, head of household claims at AXA says: "Homeowners need to make sure more than ever that they get their house in order this year. This includes making sure they take precautions against theft but also that their homes are properly maintained.

"Around 20% of homeowners have no contents insurance leaving themselves very vulnerable in the face of a year of very real increased risk.

"But even those who have insurance in place need to make sure they don't try and cut corners or are careless about their security or home maintenance as this could lead to a turned down claim.

"We sincerely hope that our predictions turn out to be wrong but we would urge people everywhere across the UK to think about what they can do to avoid the stress and potential financial loss of a burglary or accident around the home."