Events over the past few years have led to the emergence of new risks to homeowners. It is therefore essential that brokers familiarise themselves with these, assess the extent to which their customers are exposed and act accordingly.

Most recently, the Covid-19 pandemic saw many homeowners make changes to their homes and how they used them. As national lockdowns forced Britons to spend more time at home, people turned their attention towards DIY.

According to research from Statista, online sales of home improvement and gardening products grew almost 50% at the beginning of the first national lockdown, compared to the same period the year before. As socialising moved outdoors, homeowners invested in updated furniture to spruce up their gardens. Meanwhile, the shift to home working led to investments ranging from office equipment to extensions and garden buildings to improve the home-working space.

The pandemic may have changed clients’ insurance needs

Figures from the Office for National Statistics show that the proportion of people working from home more than doubled last year during the pandemic, and the shift is expected to be permanent.

TMA recently conducted research that revealed nearly three-quarters (73%) of adults would continue working from home despite the occurrence of ‘Freedom Day’ — the day when the UK lifted almost all lockdown restrictions. Employees appreciate the flexibility of home working, and employers and clients have seen little change to the quality of the work conducted.

It is paramount that brokers reassess their clients’ needs and ensure they are adequately covered post pandemic

Following these significant investments to facilitate outdoor socialising and working from home, brokers should be aware of homeowners who have invested in additional equipment themselves. Such investments and changes to their homes may have exposed owners to new risks not covered by their current insurance policy, from expensive new equipment to clients visiting their homes for face-to-face business meetings.

In this context, the pandemic may have changed clients’ insurance needs. Therefore it is paramount that brokers reassess their clients’ needs and ensure they are adequately covered post pandemic.

Extreme weather

Another substantial risk to UK homeowners — against which their existing policies may not cover them — is climate change, believed to be leading to extreme weather events. When signing new clients onto policies, brokers must also properly consider the unknown risks associated with climate change.

Brokers must also ensure that their new policies’ claims systems are fully compliant with new FCA reporting rules

Extreme weather is increasingly common in the UK, with 2020 the third-warmest and fifth-wettest year on record. And, according to a recent study by the Met Office, it is set to get even worse. Extremely hot days in the UK could increase from the current 10 days a year to 37 days. Additionally, the number of days of heavy rainfall leading to river flooding could rise by three days per year, and more severe warming could see this increase to 11 days a year.

Adverse weather is not only more frequent in the UK but more widespread. The devastation wrought by last year’s storms, Ciara and Dennis, which brought more than the February long-term average rainfall to most parts of the country, was not limited to the north or the south.

When properly informed of the risks posed by climate change, homeowners may be attracted to more comprehensive insurance policies

The unpredictable distribution of extreme weather patterns means that it will be progressively challenging to determine which homeowners are at risk; brokers must make this clear to their clients. When properly informed of the risks posed by climate change, homeowners may be attracted to more comprehensive insurance policies covering their homes against subsidence caused by extreme heat or flooding from above-average rainfall, even if their homes are in traditionally low-risk areas.

Brokers should now be familiar with the new risks facing homeowners, namely those associated with Covid-19 and climate change. To protect their clients against these risks, brokers must prioritise assessing whether their customers, new and existing, are exposed to them. If so, they should suggest more suitable policies.

Brokers must also take steps to ensure that their new policies’ claims systems are fully compliant with new Financial Conduct Authority reporting rules, which have been in force since the beginning of July. Reassessing existing customers’ policies also presents a prime opportunity for brokers to comply with the regulator’s new requirements.

Lisa Martin is development director at TMA