Insurance problems on release

The government are so set on letting prisoners out early on tag, which obviously helps them by reducing the cost of keeping that person behind bars. Which I was told could be as much as £1k per week.
However, when they are released, they have to have an address to go to, which is visited by the probation service to check suitability.
But what they do not tell you is that there will be no finacial help at all for having an extra mouth to feed, as well as the expense of another person in the house. If that house is owned by a family member. (even if it is not there mother, wife or child)
The hidden costs are also the building and content insurance gets completely cancelled due to a person with a criminal record is living at the address.
It has been said that just don't tell the insurance company, but then that puts the 'good samaritan' helping out the reformed criminal in the category of trying to con the insurance should something happen during that time.
How a person with a criminal record makes a difference to the water tank bursting, or the ceiling falling in they could not say, only it was insurance policy not to insure a house with someone who has a criminal record.