Research carried out by moneysupermarket.com found that only 16% of people took out a new home insurance policy last year. This means that millions of households will be paying more than they need to cover their home and its contents.
When it comes to insurance, loyalty rarely pays as insurers tend to offer their most competitive prices to new customers rather than existing ones. You can save an average of £131 by switching home insurer when your policy is up for renewal, rather than staying with your existing provider.
Julie Owens, moneysupermarket.com’s head of home insurance, said: “By not shopping around for home insurance, people are effectively watching their hard-earned cash go down the drain.”
Shopping around for a better policy to cover your home and contents needn’t be a chore and by following our tips below you will ensure that you grab yourself the best deal for your needs.
Buildings insurance is pretty straight forward if you have the correct information to hand. You will need to answer simple questions such as the type of property you live in, and what the walls and roof are made from. You will also need to state if your property is at risk of subsidence or flooding as this information will affect the cover available to you and also the premium you will pay.
One of the key things with buildings insurance is that you insure your home for its rebuild value, rather than the market value. This is good news, as the rebuild value is usually lower so you need less insurance.
Many people underestimate how much their contents are actually worth. Take into consideration everything in your house, from clothes, music and electricals to higher-priced necessities such as sofas, carpets and white goods. And don’t forget garden furniture and the contents of your shed or garage.
It’s really important to get the value of your contents right because if you are underinsured and need to make a claim, your insurer may only pay out a proportion of the claim. In theory it could turn it down and say your insurance isn’t valid because you haven’t provided the correct information.
Also, bear in mind that most policies cap the amount of cover for single items on their standard cover. Therefore if you have any valuables such as jewellery, art or antiques, you will need to add these as specified items.
Think about other factors, such as the excess, which will have a significant effect on the premium you pay. The lower the excess the higher the premium however don’t set your excess too high just to keep your premium low, think about what you would be able to afford to pay in the event of a claim.
Take enough time out to compare deals using our home insurance comparison tool and to read through policy wordings to ensure you get the best deal for your needs.