| Link(s): | 2nd Special Report – Financial Inclusion Strategy Financial Inclusion Strategy: Government response |
Context
The Treasury Committee has warned that financial exclusion in the home contents insurance market may cause certain consumer harm and has called for action to ensure vulnerable households are not left without adequate protection.
Key points to note and next actions
The warning is part of the Committee’s response to the Government’s Financial Inclusion strategy, originally published in November 2025, which identifies insurance as a key area for improving financial inclusion, particularly those on lower incomes.
- For households without savings to fall back on, losing essential possessions through fire, theft or flooding can create significant financial pressures.
- The Committee’s report called on HM Treasury and the FCA to develop better inclusion measures, focusing on larger providers and markets where exclusion from insurance could cause particular harm.
- In its September 2026 response, the Government agreed that monitoring outcomes where financial exclusion is prevalent is important, and the FCA noted that a number of factors needed to be considered to improve outcomes, such as considering the complexity of factors affecting exclusion, affordability, product availability and the risk profile of customers.
- The Committee’s warning suggests that contents insurance should be firmly amongst those financial services markets where the consequences of exclusion require closer scrutiny and possibly stronger intervention to ensure the right outcomes are achieved.