Initially the panel consists of four leading insurers: Zurich, Fortis, Cornhill and AIG with other insurers to be added shortly.
CETA says household insurance based on a notional sum insured is becoming increasingly important, as most homeowners do not know the rebuild value of their property. To compound the problem, many banks and building society mortgage surveys do not quote a rebuild value. Borrowers are therefore left in the dark when it comes to buying buildings insurance.
David Quick, Managing Director of CETA, said: “When it comes to buying buildings insurance, most clients assume the amount of cover required should be the same as the market value of the property – which is not the case. The insurance cost is usually significantly different to the open market value and, unless a homeowner has had a recent survey carried out which specifies a rebuild cost, most clients have no idea how much cover needs to be put in place.
“An increasing number of banks and building societies have notional sum buildings insurance products, which means it is quite difficult for brokers to sell policies in competition against them, as they cannot quote premiums on a like for like basis. CETA’s panel of notional household insurers means this is no longer a problem and brokers can start to win business back in competition against banks and building societies. What’s more, from a compliance perspective notional sum policies are the safest option for intermediaries, if their clients are unsure about the level of cover which needs to be put in place.”