Insurance Cares: Broker helps launch home contents cover aimed at closing premium poverty gap
ECH Facilities has launched a home insurance policy in partnership with the Salvation Army to help people with lower incomes to protect their contents.
The policy, SAGIC Core Home, was developed by specialist broker ECH Facilities and is underwritten by Salvation Army General Insurance Corporation. It provides £30,000 of contents and £10,000 alternative accommodation cover for just £4 per month.
Neil Bresler, managing director at ECH Facilities, designed the policy and said it will enable people with less disposable income to protect some of their contents for the first time, and help close the premium poverty gap.
He said: “The sad truth is that those who need insurance the most are the least likely to be able to obtain it, either because they can’t afford the premium, or because they live in postcodes deemed high risk by traditional insurers, or because they’re subject to punitive exclusions.
“These conditions have locked millions of people out of protection, and our industry has done little to move the needle, until now.”
Bresler stated it is estimated that of 22.6m households in the UK, 26% or six million have no home contents insurance, and that is the market the broker is seeking to help.
Reduced premium
The policy provides stripped down cover for home contents, which means it has removed high risk elements such as jewellery, valuables and accidental damage as well as fringe benefits. This enables the broker to reduce the premium to less than 15 pence per day.
Bresler stressed that the SAGC Core Home will make sure customers are protected against major perils such as fire or burst pipes.
“A policyholder can stop paying at any time at no charge and our terms are 100% transparent. The government takes 43p per policy in insurance premium tax, we receive £3 in the first month, and then £1 per month thereafter.” He commented.
The cover does not include students, and it does not have the ability to cover for flood risk in all postcodes.
Industry voices
Bresler, former managing director at Cherish Insurance Brokers, also noted that there have been some industry voices such as the British Insurance Brokers’ Association calling for more help for vulnerable groups.
Adding: “But in the main, our industry has closed itself off from tackling this issue. At ECH we are finally starting a long journey to redress the balance.”
“What we really need now are distribution partners, and we’re talking to affiliates such as social housing agencies, sheltered accommodation providers, debt management agencies and others to secure distribution.”
Insurance has noble roots, underpinned by the principle that the many protect the few, but increasing personalisation and changes to risk profiling have threatened this principle.
Gordon Dewar, SAGIC’s CEO
Also commenting on the new product, Gordon Dewar, SAGIC’s CEO said: “When Neil and his team approached SAGIC we were pleased to be able to provide the underwriting support, as this initiative closely fits our values. It is a tragedy that, thanks to the operation of the market, certain demographics often pay more for their insurance than others.
“Insurance has noble roots, underpinned by the principle that the many protect the few, but increasing personalisation and changes to risk profiling have threatened this principle. Moreover, while most insurers began life as mutuals with strong links to the communities they served, the march of progress has changed the industry out of all recognition.”
He concluded: “Our partnership with ECH is a salutary reminder that the insurance industry still has the imagination, energy and focus to be a force for social good, and we are thrilled to be playing our part in protecting those that need our help most.”
Insurance Cares
The Insurance Cares campaign created by Insurance Age is designed to encourage insurers and broker to work together to help make life easier for vulnerable customers.
It is a platform for brokers and insurers to share knowledge and practical experience about how they have helped the clients that need it the most.
In the midst of a cost-of-living crisis, Insurance Cares is now more important than ever to inspire insurers and brokers to help those in need.
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