Mortgage provider home insurance trap

First time buyer grey steps, feet and chalk boards

Don’t fall into the home insurance trap

Buying a home can be a stressful and busy time, especially if you’re a first-time buyer. Unfortunately, some UK mortgage lenders are exploiting buyers’ vulnerability by letting them believe they are obliged to buy home insurance from the mortgage provider.

A recent survey of 2,000 adults by found around 14% of homeowners arranged home insurance through their mortgage lender; 30% of these believed this arrangement was a condition of their mortgage agreement.

This means that around 466,200 UK households have home insurance policies they believed they had no choice but to take out. Around 6% who took out insurance with their lender say they were told this was mandatory and 24% believed switching providers would invalidate their mortgage.

Home insurance quote

Home insurance - mortgage application desktop

When you need home insurance

Property purchasers need buildings insurance prior to purchasing a house. Almost all mortgage agreements require a policy to be in place on exchange of contracts, so the property is protected from this point onwards.

Exchange dates are often subject to change, so Computerquote Insurance provides a document showing that insurance in principle is agreed. This is a written statement saying we are willing to insure the property based on the details provided, and giving a quote that is valid for acceptance within 30 days.

If the 30-day period has passed, we’ll simply update the quote for you. When an exchange date is agreed, the purchaser informs us so we can arrange for cover to be in place from that date.

Home insurance quote

Couple in bright, airy living room

Why using a broker delivers better value

When you get a quote from an insurance company, they will only tell you about their products. To find out if another company offers better value, you usually have to get a separate quote from them. Comparison sites might provide a range of price options, but it’s hard to work out whether a product really offers good value and meets your individual needs.

Brokers such as Computerquote Insurance are experts in their fields. We have relationships with a panel of insurance companies and know which ones will offer a product that provides great value and the best fit for your circumstances. We help you get the best products at the best prices.

Home insurance is protecting one of the biggest investments you will ever make in your life. You need the peace of mind to know that if you do have to make a claim, it will be dealt with swiftly, effectively and with minimum inconvenience. Computerquote Insurance only deals with insurers who offer good service as well as great value.
Other insurance traps – life insurance and wills

Unfortunately home insurance is not the only type of insurance where consumers can be duped or misled. The same thing happens with life insurance and will writing; individuals can believe (wrongly) that they have to take out insurance with a given provider.

The insurance deals offered by providers of other products such as wills and mortgages can represent good value, but the key is to make sure you make an informed choice. Rather than accepting a quote without researching other options, you should always have a selection of insurance policies to choose from so you can be sure you get the best value.

Whether you want to search for yourself or go through a broker such as Computerquote Insurance, the most important thing is to avoid falling into the insurance trap. Beware!

If you'd prefer to speak to a person about your home insurance, give us a call on 0800 389 9949 or 023 9224 7870. Our home insurance advisors are happy to answer your queries and provide the right quote for your new home

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