Concerns that home insurance remains poorly understood by customers are creating space for fraudsters, according to Willis Towers Watson (WTW), after scammers targeted Jersey residents with fake “water insurance” renewal calls.
Jersey Water warned customers that fraudsters had been contacting residents requesting payment or personal information for a product the utility does not offer.
While the incident is local, Stephen Cox (pictured top right), head of personal lines market UK & Ireland at Willis Towers Watson, said it reflects a wider issue across the market.
“In line with the Consumer Association super complaint there are concerns that home insurance is poorly understood by customers which results in a relatively high number of claim enquiries not resulting in a successful claim,” he said.
Cox said uncertainty around insurance cover and responsibility for services such as drainage or water supply can leave customers exposed to opportunistic approaches.
“The lack of understanding of insurance, but also responsibilities for services, which varies based on specific circumstances, and general concern about house maintenance likely create a space for fraudsters.”
Distinctions between buildings insurance, trace and access, home emergency extensions and standalone plumbing or drainage policies are not always intuitive to policyholders. Cold calls framed around “water insurance” can therefore appear plausible, particularly where maintenance costs are rising.
The episode also highlights a structural tension within personal lines design.
“We note that home insurance is treading a difficult line between being affordable – penetration is already lower than need – and meeting the manifold and complex needs of occupiers and owners,” Cox said.
According to Cox, simplifying policies to eliminate grey areas risks removing cover that meets genuine needs, while broadening coverage to remove ambiguity would materially increase premiums and reduce take-up.
“Simplification would either remove cover which is there to meet real needs or add in coverage that would make policies materially less affordable and so again reduce the good that insurance does.”
Cox added that insurers are continuing to assess product design and claims handling in response to engagement concerns.
“Firms we work with recognise the need to keep policy coverage and claims processes under constant review and to work to improve customer engagement with and understanding of insurance. There remains room for improvement, but we see things moving in a positive direction whilst doing a decent job of meeting the varied customer needs.”
The incident underlines that clear communication around what policies do, and do not, cover remains a frontline defence against social engineering tactics.
