Maximizing consumer benefits: referring home insurance leads as a mortgage adviser

In the complex landscape of homeownership, navigating through all the available insurance options can often feel like manoeuvring through a maze. Home insurance, a vital shield against unforeseen calamities, is vitally important when it comes to protecting a person’s most valuable asset: their property. As a mortgage adviser, you must not only guide individuals through the complex world of mortgage products, but also shoulder the responsibility of ensuring their overall financial wellbeing. One crucial aspect of this responsibility involves directing customers towards a comprehensive home insurance solution that fully meets their needs.

Consumer Duty and holistic financial guidance

Consumer Duty is the cornerstone of ethical practice in financial advisory roles. Mortgage advisers play a pivotal role in safeguarding the interests of their customers, not only when it comes to securing favourable mortgage terms, but also with regard to advocating for their broader financial security. Amidst the myriad of considerations that accompany homeownership, insurance often stands out as a fundamental necessity. By proactively referring home insurance leads to those with the right skills and expertise, mortgage advisers fulfil their Consumer Duty by ensuring that customers are adequately protected against unforeseen risks.

Referring home insurance leads as a mortgage adviser offers multifaceted benefits to consumers. Firstly, it simplifies the process for homeowners, sparing them the hassle of navigating the labyrinthine insurance market themselves. Secondly, it ensures that customers are equipped with comprehensive coverage that has been expertly tailored to their specific needs and circumstances. By leveraging their expertise and industry networks, mortgage advisers can connect customers with reputable insurance providers offering competitive rates and extensive coverage options. This not only saves time and effort for homeowners, but also mitigates the risk of underinsurance or inadequate protection.

Furthermore, by integrating insurance guidance into their advisory processes, mortgage professionals demonstrate a commitment to holistic financial wellbeing. Beyond securing favourable mortgage terms, this approach extends to safeguarding the entirety of the customer's financial portfolio, including their home. Such proactive engagement fosters trust and loyalty, enhancing the adviser-customer relationship and positioning the adviser as a trusted financial partner for the long term.

Cost inflation in home insurance: understanding the factors

In recent years, the landscape of home insurance has been marked by a notable trend of cost inflation. Several factors have contributed to this phenomenon, chief among them being the rising frequency and severity of insurance claims due to various perils. Extreme weather events have become increasingly common, resulting in a surge in property damage claims. Similarly, incidents such as subsidence, escape of water and vandalism have all contributed to the escalating claims burden now being borne by insurance providers.

The impact of climate change cannot be overstated in this context. With changing weather patterns and an increase in the frequency of extreme weather events, insurers are faced with mounting financial liabilities stemming from property damage claims. Moreover, the consequential rise in property values has exacerbated the financial implications of such claims, further driving up insurance costs.

Additionally, the escalating cost of building materials has presented a significant challenge for insurers. As construction costs soar, insurers are compelled to adjust premiums to reflect the higher costs associated with property repair and rebuilding. This factor is compounding the overall inflationary pressure on home insurance premiums, contributing to the financial burden shouldered by homeowners.

Poor practice

Although insurers understand the cost implications, some providers are moving away from an education and advice model and moving towards slashing premiums. The issue here is that the only way insurance companies can make low premiums economically viable is by including high excess charges and cutting cover, both of which are statistically higher in the claims ratios. As a result, we are now seeing polices that completely exclude cover for subsidence, escape of water or accidental damage.

Conclusion

When it comes to helping customers navigate the complexities of homeownership, the role of a mortgage adviser extends far beyond securing favourable mortgage terms. By proactively referring home insurance leads, mortgage professionals fulfil their Consumer Duty by safeguarding the financial interests of their customers. Furthermore, understanding the underlying factors driving cost inflation in home insurance underscores the importance of comprehensive coverage tailored to mitigate the risks posed by extreme weather events, subsidence and other perils. By providing holistic financial guidance that encompasses insurance considerations, mortgage advisers take an active role in empowering homeowners to protect their most valuable asset – their property – against unforeseen calamities.

How First2Protect can help

One of the major obstacles mortgage professionals encounter in referring their customers to an external provider is the issue of trust.

How can one be sure that the chosen insurance provider will deliver the same outstanding level of service that you yourself provide? How do you know that they will truly act in your customer’s best interests?

First2Protect has over three decades of experience across the property, lettings and mortgage intermediary markets, and a people-first philosophy that lies at the heart of our business. It is this philosophy which underpins our commitment to delivering the very best customer experience at every stage of their journey with us. We’ve invested heavily in technology to provide a full self-service option for customers wishing to manage their policy themselves, whilst ensuring they always have access to expert advice via telephone or live chat.   

To see what our customers are saying about us, we encourage you to visit our TrustPilot page, where we have over 1,700 ratings with an average of 4.5 stars.

To find out more about how our referral service works, please do drop us an email at businessdevelopment@first2protect.co.uk. We promise your customers will thank you for it!

Brian Coulton 
Strategic Partnerships Director at Pivotal Growth & First2Protect