ECH Facilities spearheads launch of new home contents cover

Specialist broker ECH Facilities and Salvation Army General Insurance Corporation (SAGIC) have launched a new home insurance policy designed to tackle ‘premium poverty’.

The policy, called Core Home, which was developed by ECH Facilities and is underwritten by SAGIC, provides £30,000 of contents and £10,000 alternative accommodation cover for just £4 per month.

Neil Bresler, the broker who designed the policy, said it will enable people with less disposable income to afford to protect some of their contents for the first time, and help close the ‘premium poverty’ gap.

He explained: “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.”

Core Home provides stripped down cover for home contents, ensuring protection against “major perils such as fire or burst pipes”.

It doesn’t protect “high risk elements” such as jewellery, valuables and accidental damage, as well as well as “fringe benefits, which are the prime factors behind the high cost of cover”, according to Bresler.

He said: “This enables us to reduce the premium to £4 each month, which is less than 15 pence per day.”

The policy is specifically designed for the 26% (or six million) of the 22.6m households in the UK that do not have home contents insurance.

Bresler said: “This product is positioned for those that require essential cover only; we don’t cover students (they are served by other specialist insurers), and we don’t have the ability to cover for flood risk in all post codes.”

ECH Facilities is now seeking partners such as social housing agencies, sheltered accommodation providers and debt management agencies to secure distribution. 

Bresler said: “In order to make this product work, we need partners who can get the product to those six million people that need our help.”

Commenting on Core Home, Gordon Dewar, SAGIC’s chief executive, 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.”

He added: “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.

“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.”

Bresler commented: “There have been some industry voices such as BIBA (British Insurance Brokers’ Association), calling for more help for vulnerable groups, 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.”

Image: © CharlieAJA via Canva

Mark Dugdale