Home. For most, it’s a sanctuary. But in a global pandemic, when there’s nowhere else to go, how then do we feel about our homes? And how do we protect them in today's changing world?
Home. For most, it’s a sanctuary. But in a global pandemic, when there’s nowhere else to go, how then do we feel about our homes? And how do we protect them today's changing world?
We spoke to three people. One who invested in their home. One who moved closer to family. One who relocated from town to country – all during the pandemic. And we asked Sarah Applegate, Quantum Data Science and Partnerships Lead, what COVID-19 means for home insurance.
Oisín – “I started with nothing”
“Everyone was looking for a new hobby during the pandemic. I was always eager to throw my hand in and try a bit of woodworking.”
… and so Oisín’s ambition to build his own kitchen for his home in Ireland became reality.
Oisín isn’t alone. Aviva research estimates 1.5 million homeowners in Ireland spent over €11 billion on home improvements during the pandemic.
Brian Mahon, Chief Underwriting Officer at Aviva said: “The numbers are significant. If we take the fact that there are over 2.2 million homeowners1 in Ireland, our survey suggests that 66% of them carried out work in 2020/2021, which cost an average of €7,343 per household.”
Oisín had been quoted around €30,000 for his dream kitchen. He thought he could build it himself for €2,000. And with his two-hour commute temporarily cut to zero, he had the time to give it a go.
“I started with nothing. I had a screwdriver. I’ve been fortunate to have the money to buy tools and the time and opportunity to invest in myself. There are a lot of things I thought were out of reach, which definitely aren't. Because of the pandemic, I got to make something of my own.”
Pearl – “we expected our house to sell straight away”
Pearl sold her home in the UK during the pandemic, but it took longer than she hoped.
“When we decided to downsize and move closer to our daughter, we expected our house to sell straight away. When we bought it, we’d put in an offer the day it came onto the market. But it was a different story for us." Finally, with a cash buyer waiting and a house-buyer tax holiday set to end, the pressure was on to move quickly or risk losing her buyer.
Aviva’s property panic-buying research shows 94% of pandemic property purchasers in the UK felt under pressure to buy quickly, taking 46 minutes to view.
Nine out of ten people who bought during the pandemic found problems with their properties after moving in – compared to 60% of all homebuyers surveyed.
Owen Morris, MD Personal lines at Aviva said: “It can be easy to fall in love with a home on first viewing, but we’d urge people to do their homework and proceed with caution when making one of the biggest financial decisions of their lives.”
Like so many others, Pearl and her husband were faced with unexpected property problems:
“There were a few teething problems after the move. We didn’t have keys for all the doors to our new house and we decided to change all the locks in the end. We discovered a few leaks too, but luckily our son-in-law is a plumber, so he helped out a lot. We’re really happy to have made the move, though, and it’s lovely to be a few minutes away from family.”
Amy – “our family needed space”
In Canada, the pandemic sped up Amy’s plans to move from town to country.
“We'd been talking about moving, but we figured it would be another year or so. Then the pandemic happened. We were living in a three-bedroom house and we didn’t have a tonne of space. Our daughter was getting bigger. She needed space to run around and being in lockdown, it was just… It was a lot.
"But we were enjoying getting out of the city when we could. We ended up coming across a house and asking about it. I don't think we would have our new home without the pandemic.”
Aviva Canada research shows that 1 in 3 Canadians are considering relocating post pandemic. Many, like Amy, dream of a rural locations. But moving away from large cities could bring a few surprises…
“There’s more to think about than just the mortgage and property taxes, because there are insurance considerations when it comes to rural vs urban properties. The age of the home, its proximity to fire hydrants or firehalls, and flood risk are all factors that insurers take into account.” Phil Gibson, Managing Director, Personal Insurance & Data Science, Aviva Canada
But for Amy, there are no regrets. “I can’t think of anything I miss back in the city,” she says. “It’s a lot nicer waking up hearing the birds chirping than the highway.”
Sarah - "it's really important to check your cover"
We've seen the pandemic and COVID-19 lockdowns changing how we live and work in a number of ways. Perhaps you've made some hefty pandemic purchases, changed where you work, or even where you live.
In this short recording, Sarah Applegate, Quantum Data Science and Partnerships Lead, shares some tips to make sure your insurance covers you for the changing world that we now live in:
"Pandemic purchases... gym equipment, garden furniture, bikes, even new instruments… when you're buying expensive items, that could have a knock on effect on your insurance."
Quantum Data Science & Partnerships Lead
So we've seen the pandemic and the COVID-19 lockdowns changing the ways in which we live and work in a number of substantial ways. I'm going to chat about three briefly today, which are: home contents and our pandemic purchase habits, working from home, and multigenerational households.
With home contents and pandemic purchases, I think we've all been ordering some things online during the various lockdowns and we might have taken up some new hobbies that require new pieces of equipment. So gym equipment, garden furniture, bikes, even new instruments… and it's important to remember when you're buying sometimes more expensive items that that could have a knock on effect on your home insurance policy.
So it's really important to check your contents cover will cover those additional items that you've purchased and that they won't breach any single item limits. This means if you have an expensive item such as over say £2,000 or £3,000, that might breach a single item limit.
Next to talk about is the differences in how we work. So we many of us are now working in our home, or sometimes it may feel like living in our offices, and there's an expectation for more hybrid working as we go into the future. Aviva's recent how we live report found that 43% of people are planning to use their home offices more. 13% of people are planning to convert sheds and outbuildings for a home office.
When it comes to insurance for home offices and sheds or buildings, it is different in how these are included in our insurance policies.
If you store items in the home, you will usually be covered for clerical type equipment, so laptops, keyboards, mouses computer screens, etc. But you may not be covered if you are taking up a piece of work that is considered non-clerical. So if you are a baker, for example, you'll need to make sure that you have the right insurance coverage and please do check with your insurer or broker to make sure that that's appropriate.
If you have started working in a home office or outbuilding, it is important to remember that your insurance may not always cover all of the items that you have out there. There is usually a limit for the amount of coverage that's provided under your home or contents insurance for items stored outside of the home. Please do check this with your insurer or your terms and conditions to make sure that you're not breaching and won't be unable to claim should anything unfortunate happen to one of your outbuildings or your shed that you're working in.
One thing that we found in our How We Live report was the way that we live and who we live with has changed the number of adults living in multi-generational households has increased and the how we live report by Aviva's found that one in eight plan to have a granny flat or an annex in the coming periods.
And while we call them Granny Flats, actually, we're starting to see a shift in younger people wanting to live in these annexes. So either people who haven't moved away from home yet as they've become a young adult or people boomeranging back after college and university - otherwise known as Graddy Flats.
So a few tips to make sure that your insurance covers you for the changing world that we now live in post-pandemic. Make sure that you review your contents cover on any bulky or expensive purchases bought during the lockdowns is covered under your single item limit.
Tip two: limit the storage in outbuildings, sheds and garages. You may not be covered for storing as much in outbuildings as you may be inside the home so please check this with your insurer or broker.
Third tip: Inform your insurer if you're planning to make substantial changes to your home before any work starts, so this could be a building an annex, converting an outbuilding, or extending your home, for example.