Cutting the cost of your home insurance
With home insurance premiums on the rise, some homeowners are choosing not to protect their properties and contents either because they cannot afford it, or they feel as though they will not need it.
Unfortunately you cannot plan for the unexpected and without the necessary cover in place you could be risking losing your home.
Cutting the risk
When working out your home insurance premium, the first thing the insurer will look at is the risk involved. This can be anything from how vulnerable your home is to theft or fire or if there is a history of subsidence in the street you live in.
If you are able to reduce the risk of your insurer have to pay out then ultimately you can reduce the cost of your annual premium. This can be done in a number of ways:
- Improve the security of your home. By fitting a NACOSS standard alarm it could reduce your home insurance premium by up to 7.5%. Also joining a neighbourhood watch scheme could also save up to an additional 5%.
- Reduce the risk of fire. Fit and maintain smoke alarms in your property. Also many insurers will now ask if you or any family member smoke. This would increase the risk of fire therefore you should expect a rise in the premium.
- Increase the amount of excess you are willing to pay towards a claim. This can reduce your annual premium up to a point, however only set the excess at an amount you are willing and able to pay.
- No claims bonus. Some insurers will offer a no claims discount and this could help reduce your premium by up to 20% based on the number of years you have not claimed on a policy.
For more tips on how to save money on your home insurance and protect your home, read our money saving tips section.
Do your research
This is the best way to make sure you find the right deal for you and your home at the most competitive price.
Take the time to fully understand what parts of a home insurance policy are the most important to you. For example, do you really need accidental damage cover? If not then leave this off the policy.
Use our contents calculator to work about the amount of your possessions that you want to cover. Leave off inexpensive items or items that you will more than likely replace yourself rather than claim on your home insurance.
Another, yet more drastic option is to move home. An insurer will base your premium on your postcode, and as shown in this article, the cost of home insurance has risen quite drastically in certain areas of the UK.
When you are ready to purchase a policy, use the moneysupermarket.com price comparison tool. In just two minutes you could have a quote from over 74 home insurance companies saving you both time and money.
Do not simply opt for the cheapest home insurance policy as the reputation of the insurer and the finer details in the terms and conditions are more important. Take some time to research the company and read through the wording of the policy to make sure everything you want covered, is covered.
Making a claim
Firstly you must weigh up the options of whether it is worth making a claim. As said earlier if the item that is damaged or lost is easily replaceable then it may be worth not making a claim. Additionally, if the item cost is less than the excess payment of the policy then it will not be worth making a claim, as any claim you make will no doubt increase your premium for next year.
If you do need to make a claim then it is essential that you inform your insurer as soon as possible. Some insurers may have a clause within their terms and conditions that a claim must be made within a certain timeframe. When it comes to the theft of money, it is usually required that this is reported to the police within 24 hours.
After you have spoken with your insurer regarding your claim you will in turn be sent a form to fill in. This will require you to detail the problem and you may be required to supply evidence such as photos or a police incident report number in the event of burglary.
If you have 'new for old' cover you will be able to claim the full cost of the item damaged and it will be worth while if you could provide receipts for the item. If you have an indemnity policy then you will need to deduct an amount to compensate for wear and tear.
For a major claim your insurer may send out their own loss adjustor to validate your claim and to access whether your claim is compliant with their terms and conditions. This could lead to the insurer not paying out on a claim, which is why it is essential that you study the terms and conditions of the home insurance policy at the point of purchase and all information you give the insurer is accurate and factual.
Exclusions
It is very important to understand the crucial elements of your policy that may threaten your claim and be the difference between a claim paying out.
When it comes to your property, there may not be many more expensive commodities in your life hence why it is essential that you get the right policy in place from day one.
Common exclusions that may threaten your claim can include:
- Falsified information. It may seem tempting to withhold information or give incorrect information to make the home insurance premium cheaper. However this is a false economy as when you really need the insurance to pay out, any holes in the information you give will lead to your claim being rejected and your policy invalidated.
- Lack of maintenance. If any repair work is needed due to your own negligence of the property then it is unlikely that your insurer will pay out.
- Failure to install security systems. If you home insurance policy has a minimum requirement when it comes to security then failure to comply with this will lead to the insurer not paying out. Similarly if you fail to maintain your smoke alarms then this could also lead to your insurer not paying out on a claim.
In the final part of our guide we will show you how to find the best home insurance quote.