Five steps to cheaper home insurance

No-one likes spending money on insurance. But having adequate cover is important for peace of mind and financial well-being. So the trick is to get the right policy at the keenest price possible.

Here’s five ways you can crunch the cost of your home insurance.

1. Multi-policy discounts

There are two types of home insurance, and each does what it says on the tin: buildings insurance covers the building itself, plus permanent fixtures and fittings.

Contents insurance is for your belongings, including furnishings and white goods such as your washing machine and the fridge and freezer – pretty much anything you could move out of the house.

If you own your home outright or have a mortgage, you need both buildings and contents. If you rent, you only need contents cover as the landlord will insure the building.

If you do need both types of cover, you can usually get a discount if you buy them from the same insurer. And some providers extend their multi-policy discounts to include motor insurance as well.

Be sure to get an accurate sum insured for both types of cover. You can check the rebuild value of your property here. And our ready reckoner will help you work out how much cover you need for your contents

2. Security discounts

One of the main reasons people claim on their contents insurance is for losses due to burglary – which is why insurers offer discounts to those who take action to prevent theft.

You’ll find most insurers will trim your premium if you fit robust windows and door locks, an alarm and join a Neighbourhood Watch scheme.

Prevention is better than cure, so taking such steps is a good idea anyway. But check with your insurer what type of lock and alarm they will recognise for discount purposes – usually five-lever mortise locks and a NACOSS-approved alarm.

It may also be the case that, once the security measures are deployed, you are actually required to use them whenever you leave the house.

In other words, you may not be covered for loss if you leave a door or window open and a burglar gains access without forced entry.

Your home is inevitably more vulnerable when you are away, especially for longer periods.

Remember to cancel the milk and the papers when you go on holiday, consider automatic switches for lights and curtains, and ask a friend or neighbour to generally keep an eye on the place, particularly getting rid of any leaflets or flyers left dangling from your letterbox.

3. Safety first

People who make claims on their home insurance tend to pay more come the next renewal.

People who don’t can get no claims discounts that build up over the years. The discounts are not as substantial as the 65% you can get on your motor cover, but a 25% discount after five years is still worth having.

You can reduce the likelihood of a claim by taking action to lower the risk of fire – that means having working smoke alarms (and checking them regularly), no overloaded plug sockets and no faulty wiring.

Take extra care with cigarettes and candles, and don’t leave the kitchen unattended when you’re cooking.

If fire is a big threat, so too is water. Burst pipes are a major source of claims, so insulate pipes and tanks to prevent freezing. If you live in a flood risk area, there are a number of steps you can take, as described in our article on the subject.

4. Pay annually and choose a higher excess

When you arrange your cover, you will be given the choice of paying the premium all in one go or paying monthly, to spread the cost.

Paying by instalments can seem an attractive option, but be aware that the insurer will more than likely charge you for the privilege – so you could end up paying up to 10% more over the course of the year.

So if you have got the funds available, settle the premium bill all in one go.

You can actually reduce the premium by opting to pay a voluntary excess on top of the mandatory excess that comes with the policy.

The excess is the amount you must contribute to the cost of any claim you make, and it is imposed to deter people making large numbers of costly-to-administer claims that would push up the premiums for everyone.

A typical mandatory excess would be £100. Our home insurance quotation service allows you to gauge the impact of different levels of voluntary excess on the premium.

But it is important not to set the voluntary excess at such a level that you would not be able to afford to pay it if you made a claim.

It’s also worth noting that home insurance policies come with two mandatory excesses – a standard one, as described above, and a separate and additional one for subsidence claims.

The subsidence excess will be much higher – £1,000 in areas not particularly prone to subsidence, and £5,000 in areas of high subsidence risk

This reflects the huge costs involved in tackling subsidence problems.

5. Shop around

Perhaps the most important money-saving tactic is to shop around at each and every renewal.

Insurers don’t reward customer loyalty, so there’s no incentive to stay put.

And you can usually take any no claims discount with you to a new insurer. It could be particularly worthwhile checking what the market has to offer if you bought home insurance through your bank or building society when you took out your mortgage.

Our records show the average price of combined building and contents home insurance taken out after shopping around on MoneySupermarket costs in the region of £150 a year, which means you could easily secure savings of £100 or more.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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