Sometimes it can seem like just one expense too many, when we’re at the end of the long and costly road to home ownership or a new rental. But we forgo it at our peril: home insurance. It generally comprises two forms of insurance – ‘building’ and ‘contents’. However rash it might seem, many people decide to skip contents insurance and take their chances with good home security. But for those of us who don’t want to throw caution to the wind, it’s important to have both types if you’re an owner (renters will only need contents insurance). It’s hard to have a wholly positive relationship with the insurance process – after all, there’s something dismal about spending money every month on a product you hope you never have to use. It can feel like a lose/lose: if you never make a claim, then it’s like throwing money in the bin (yes, there’s the ‘peace of mind’ factor, but you can get that for free with mindfulness or a bracing walk), but if you do make a claim, it’s usually because something bad has happened. And then there’s another bitter pill to swallow; if we do find we want to use our insurance policy, we discover that the main aim of insurance companies is to come up with ever more ingenious ways of concluding that your claim is invalid and that they don’t have to help you after all. So to that long list of rather bleak inevitabilities in life – rain, death, taxes – we should also perhaps add insurance. If you’re about to contend with the process of finding a policy, then we’ve looked at some ways to make sure you stand the best possible chance of getting a good deal, with a good company.
- Shopping Around
- Don’t Over-cover Yourself
- Combined Policies
- Paying Annually
- Home Security
- Increasing the Excess
- No-claims Bonuses
Shopping Around
At the outset of a search for good home insurance, don’t forget to get multiple quotations. Ideally, you should know exactly what you do and don’t need, so that you’re only having to consider quotations that reflect the insurance you actually want. Also worth taking into account at this stage are the suggestions of friends and family. Perhaps you have a friend whose insurance requirements match yours; that person’s advice could be particularly pertinent and beneficial. And along with your multiple quotations, reviews sites like TrustPilot and Google Reviews can help you make an informed judgment. Cheap doesn’t necessarily mean best – it could be false economising to go for what looks like the best deal only to find out further down the line that you’re paying for repairs you thought you were covered. Lastly, if applicable, it could be that your mortgage provider offers bundled or stand-alone insurance deals. While they may not represent the best offer, they could still be worth a look. There’s something to be said for dealing with fewer companies.
Don’t Over-cover Yourself
It’s very possible that, at the quotation stage, the buying stage, or both, an insurance company will try to upsell you. The person you’re speaking to may well get a commission the more they’re able to supersize your insurance deal. These extras could include legal expenses cover; home emergency cover; accidental damage cover; garden damage cover; bicycle cover and more. Making things more confusing is that some companies will include one or more of these forms of cover in their standard package while others will only offer them as chargeable extras. It’s worth thinking all of this through in advance, so you know what you do and don’t want.
Then there’s the risk of over-covering yourself by overestimating the value of the contents of your home and its rebuild value (this means the amount of money it would take to rebuild your home from the ground up and is not the same thing as its market value). There are various helpful guides online to assist you with the task of coming up with the right figure for both these amounts. For contents, you could take a look here, and for buildings insurance, try this.
Combined Policies
If you rent, then you’ll only need to get contents insurance. Owners, on the other hand, need both types of home insurance – and a combined policy could be less expensive than two separate ones. When you’re getting your quotations, you can ask each company if it offers a discount on combined polices. Nevertheless, when you’re going over all your quotations, it’s worth double-checking the totals for separate policies; you could still find that it’s cheaper to go with two companies.
Paying Annually
Here’s a fairly straightforward way to bring down your overall insurance cost – pay annually rather than monthly. In almost all circumstances, you pay less if you pay the annual premium in one go. That’s because with monthly payments, there’s an interest charge. If you’re not clear on this, add up all the monthly charges on your quotation and then see how the monthly total compares to the annual one.
Home Security
The cost of home insurance, especially the contents aspect, can be brought down by upgrading your home’s burglar-proofing. Upgrades that can save you money in the long run include burglar alarms; a safe (especially important if you’re planning to insure valuables); better locks for your doors and windows. You’ll also find that some companies are willing to charge you less for insurance if you’ve joined a Neighbourhood Watch scheme. If you’re interested in doing this but don’t know where to start, visit the NW website here.
Increasing The Excess
You can often bring down your annual or monthly payments by agreeing to a larger excess (the sum you have to pay when you make a claim). Obviously, the less likely you are to use your insurance, the more this kind of gamble makes sense. Before you do it, however, just remember to be sure you only agree to an excess you feel confident you could readily pay at a moment’s notice.
No-claims Bonuses
A slow but steady way to keep your premiums down is never to use your insurance policy – and to continue never using it, year on year. You’ll be building up a better and better no-claims bonus. That’s why it can sometimes make sense not to use your insurance if the claim is small enough that you can deal with it privately. And, of course, it’s easier not to make contents-insurance claims the more secure your home is. In addition to the security upgrades already discussed, you could consider security lights and smart bulbs that enable you to give the impression of occupancy even when you’re way. Don’t ever do the ‘spare key under a potted plant’ thing and keep valuables where it’s impossible to view them from outside. To make it less likely that you’ll need to make a buildings-insurance claim, be sure to have workable smoke alarms, look into ways of preventing water pipes from freezing in the cold months and keep gutters regularly cleared.