Lloyds TSB to pay premiums for redundant as policies cut

Lloyds TSB, which claims to be Britain’s largest home insurance provider, has pledged to waive home insurance customers’ premiums for up to six months if they are affected by redundancy after finding polices were being cancelled.

It said the move follows a recent meeting between the Home Office, the Association of British Insurers (ABI) and leading insurance firms to discuss how the industry might best support policyholders through the recession.

The move follows a survey that suggested policies were already being cancelled and may not be renewed:

  • 15% have cancelled home insurance policies mid term over the last year in an attempt to cut costs
  • a further 10% admitted they would be prepared to do so if their financial situation deteriorated.
  • 13% said they were unlikely to renew their home or motor insurance when it next expires
  • 79% admitted they would have no other way of replacing their belongings if the worst happened and they were burgled or flooded
  • 60% of those surveyed said they were worried about their financial circumstances
  • 24% believed their job could be at risk over the next twelve months
  • 65% believe they are more at risk of home burglary in the current climate
  • 75% are actively reviewing annual commitments and cutting back on household bills wherever possible
  • 43% would be likely to cancel a service or subscription without shopping around to see if savings could be made

Mike Canniffe, retail banking insurance director, said: “Our pledge offers extra breathing space to British homeowners who increasingly find themselves in a Catch-22 situation. Despite feeling more concerned about the security of their homes, many are having to seriously consider cutting back on household essentials, such as insurance, just to make ends meet.

“In these uncertain economic times many of us are making sacrifices, but it’s alarming that so many are prepared to forego the valuable safety net insurance offers.”