Switch to save as home insurance costs tumble

Homeowners are benefiting from lower home insurance premiums, but it still pays to shop around for cover every year rather than sticking with the same insurer.

Our latest research reveals that home insurance premiums have fallen the furthest in Bolton and Brighton over the past year, dropping by 23% and 14% respectively.

We analysed 12.4 million home insurance quotes run over the past four years and found that average premiums across the UK as a whole are now at £124 a year, compared to £136 in spring last year, a drop of 9%.

Biggest premiums falls

Bolton and Brighton might top the table for the biggest premium falls, but plenty of other areas are also enjoying much lower home insurance bills.

Southampton, for example, has seen premiums drop by 14% over the past year, while premiums in Colchester and Exeter have both fallen by 13%.

Homeowners in all areas of the UK are paying less for their home insurance, with premiums down by 22% over the past four years. This is the lowest they have been since our MoneySuperMarket Home Insurance Monitor began in Spring 2010.

Kevin Pratt, insurance expert at MoneySuperMarket.com said: “The trend of home insurance deflation continues apace – welcome news all round to homeowners across the country. As well as intense competition among insurers – stimulated in part by price comparison websites – prices are also falling to reflect a decline in the number of burglaries, which have been reducing in number since 2011.”

The fall in burglaries was noted by the Office for National Statistics. It said in January that ‘household’ crime, which includes property and vehicle-related incidents, fell by 10% in the year ending September 2013.

Loyalty DOESN’T pay

Premiums may be falling, but sticking with your existing insurer is unlikely to net you the best deal, so always compare quotes from other providers before buying cover.

Kevin Pratt added: “Even though a renewal quote might be cheaper than the price paid last year, chances are homeowners will be able to save even more by switching to a different insurer, so it is really important to shop around to maximise the savings available.”

According to independent research by market research company Consumer Intelligence, 51% of consumers who shopped around for their home insurance using MoneySuperMarket during May this year achieved savings of up to £70.

Money saving tips

As well as comparing quotes, there are several other things you can do to reduce the cost of your home insurance.

For example, you could consider increasing your excess, which is the portion of any insurance claim you pay yourself, although you shouldn’t make it so high you can’t afford to make a claim.

Installing security measures such as an alarm and window locks can also help bring premiums down.

If possible, you should try and pay for your home insurance annually rather than monthly. Although this will mean paying a big lump sum once a year, you can make substantial savings compared to paying monthly, as insurers add on interest charges if you pay in instalments.

Declare valuable items

If you have certain items which are particularly valuable, for example an engagement or wedding ring or painting, you should make sure these are individually listed on your policy.

MoneySuperMarket’s Home Insurance Monitor found that the value of contents Brits are insuring in their homes as ‘single items’ named on their policy has reached it’s the highest point since analysis began in March 2010 – increasing from £2,694 in Spring 2010 to £3,494 in Spring 2014, a 30% increase.

Kevin Pratt said: “It’s vital to declare higher value single items on your contents insurance policy to ensure you are adequately insured.

“Every insurer sets a ‘single item policy limit’ – the maximum amount it will pay out on any single item unless you list it separately when you take out cover. This limit is usually in the region of £1,500, but it’s best to check your documents to see what is specified.

“If you have jewellery, computers, antiques, works of art, collections, musical instruments or other valuables that are worth more than your single item policy limit, make sure you list them to avoid problems. For example, if the single item limit is £1,500 and a ring worth £2,000 is stolen from your home, you could end up with a £500 shortfall.”

Keep records

You can make the process of filing an insurance claim a lot more painless if you’ve got receipts for items you’ve bought, as well as up-to-date valuations for any particularly expensive possessions.

You should also take photographs of any items that are very important to you. This will provide your insurer with valuable evidence in the event of a claim for theft or damage.

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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