It seems inevitable that insurance prices will continue to grow year on year but when it comes to home insurance there is plenty you can do to cut the costs. If you are due for a renewal, or are looking to take insurance out on a new property, don’t do anything until you’ve read our essential guide to finding the best price home insurance.
UKMM Tip #1 – Don’t Renew!
This is one for those who already have insurance. Insurers’ price rises affect existing customers far more than they do new customers. This is because insurance companies offer low prices to entice new customers in and underwrite this by charging their current customers more. If your renewal has landed on your doormat, put it to one side while you look for a better deal.
UKMM Tip #2 – Think Carefully About Your Cover
According to The Telegraph (27 August 2012), 6.8 million homes are not covered for the full value.
Buildings insurance – insure for the rebuilding costs
The average house in the UK is worth around £225,000 but the cost to rebuild the average house would be roughly half of that. When taking building insurance, only get a quote based on how much it would cost to rebuild your house, rather than its market value.
Contents insurance – don’t underinsure
You should also reassess the value of your contents. Underinsurance, or ‘average’ or also known as ‘condition of average’, is explained well on Wikipedia but the short version is that if you insure for half the value of your total contents you own, you’ll only get half the payout if you have to claim. This can be quite a shock if you have just had, for example, a small fire that eventually amounts to about £5,000 of damage. You’ll be left finding £2,500 yourself, and that’s after the excess has been deducted. Similarly, you may have a nice plasma TV that in it’s heyday cost £3000 but can easily be replaced for £600 now. You will only need to insure for the smaller amount.
Having warned about underinsurance, a lot of companies are giving all policyholders blanket sums insured that tend to cover far more than the average needs which eliminates any possibility of underinsurance. It’s best to check carefully though.
UKMM Tip #3 – Get Secure
A sure fire way to reduce home insurance costs is to ensure that your property is safe and secure. Investing in approved smoke detectors, window locks and burglar alarms can help reduce your premiums with your insurer.
UKMM Tip #4 – Haggle
Far too often, consumers choose the lowest price on the price comparison site and sign up straight away. However, the price you’re quoted is not necessarily the price you’ll pay. Remember that renewal that landed on your doormat? Grab hold of it now, and the cheapest quote from the price comparison site, and give your insurer a call. You’ll often be surprised at just how quickly they can undercut it.
UKMM Tip #5 – Cashback
Even if you find a really good deal on the phone, it may yet be cheaper to buy online when you factor in cashback sites. These sites will refund you a percentage of your premium as long as you buy through their site meaning that you could end up with comprehensive cover for just a pittance.
So whatever you do, do not renew and you could find the best price home insurance.