Meet Mr & Mrs Average

New research about the average Brit shows the cost and frequency of accidental-damage home insurance claims.

Aviva recently looked into average homeowners.* It says they:

Are non-smokers called Mr and Mrs Smith.
Live at The Cottage, The High Street, which is a three-bedroom detached house with one bathroom.
Have two cars, one a Ford Fiesta.
Go to Spain for their holidays.
Value their possessions at £28,000.

It goes on to say that Mrs Smith makes a claim against her contents insurance for accidental damage once every 8.5 years and Mr Smith once every nine years, with the average accidental-damage claim being £350 (plus the excess on top). That's about £700 in benefits for the pair's clumsiness every nine years.

Is it worth it?

Aviva, formerly Norwich Union, is the biggest insurer in the UK, which means that the average householder is insured through it. What's interesting is that if Mr and Mrs Smith get a quote from Aviva, the total cost of contents insurance over nine years is about £1,230 (using a Farnborough post code). That means you've paid £523 more than you've received in claims payments for your two accidents.

Related goal

Slash your insurance costs

If you’re feeling the pinch, these ways of saving money on your insurance will help.

Do this goal

That premium is based on the assumption you go for a £200 excess. That's the excess Aviva defaulted in my test, so I'm assuming that the average Aviva policyholder also has that excess.

That also assumes you've gone for the basic contents cover, which, like most contents insurance policies, includes some accidental damage cover to home entertainment equipment, mirrors and fixed glass (but read the exclusions in the contract). If you want more complete damage cover, for spillages, breakages, and more, you'd have to pay £2,130 over 9 years, which means you'll pay more than three times what you receive in accidental damage benefits!

Let's not all rush to cancel our contents insurance

Don't forget that £350 per person every nine years or so is just the average. Many people may claim for less, but some people making big boo-boos will claim for a lot more. Your risk increases with children or clumsy people in the house, or if you tend to have lots of guests or parties.

Let's also not forget that there are other reasons to claim. With 'nearly' 50% of contents insurance claims being accidental-damage claims, according to Aviva, this means that more than 50% are other sorts of claims, e.g for malicious damage, fire or theft.

However, consistently for many years, average payouts for home insurance (buildings and contents) have been rather low. For every £1,000 we pay in premiums, we receive on average just £550 back in claims payments. This indicates that Aviva's contents policy might be no better than average for average people. For people with more unusual profiles they may offer better deals.

Make a tailor-made decision

For some of us contents insurance will make sense and for others different provisions will. It depends on personal circumstances, such as clumsiness of all the residents (and pets, although watch out for pet exclusions) and your ability to save for emergencies. It also depends on the home, such as how flammable it is and what crime is like in the area. You need to weigh all the factors up against the cost and quality of any insurance policy you're considering.

Burglers aren't like lightning

Having worked in the insurance industry as a consultant, claims manager and paralegal, I've vetted some of your recent suggestions in the comments section beneath our articles. You've come up with a few good tips:

If you've been burgled once, statistically you're more likely to be burgled again, or even again and again. Once it's happened, take some extra precautions. You may find that your insurance quote doesn't jump too much after your first burglary claim, so it may well be worth it the next time. After your second claim in three years, however, the price jumps a fair bit, and after your third it becomes very expensive and often impossible to get without special underwriting. Hence, extra precautions earlier on may serve you well.

If you have had to make three claims of any kind in the past three years, you're going to face massive premiums when you come to renew and very few insurers interested in taking care of you. Consider paying back the smallest claim to the insurer who dealt with it and make sure that the insurer takes the claim off its list for the reference of future insurers. You could expect then to receive much better quotes.

Don't underestimate the chances of making a claim, from small ones such as smashing a small window to potentially big ones such as fire and theft. Don't forego insurance without having a plan for disasters, or you could end up in a distressing situation.

More from lovemoney.com

Don't be average like Mr and Mrs Smith: shop around to get cheaper or better insurance, and that will increase potential claims payouts or at least reduce your premiums!

*Aviva must have used the modal average, not the more typical mean average. In this case that makes sense.