Your home insurance gives you valuable financial protection against things like fire and theft, but you should not pay more than you have to for cover. Here is how to save on your policy.
Always get a range of quotes when you look for a home insurance policy. Prices will vary between different insurers so shop around to find the cheapest deal.
Before you start comparing home insurance quotes work out what you need it to cover and only look at policies that offer everything you need.
It will cost you more long term if you buy a cheap policy that does not give you the protection you need and you have to pay to repair or replace your belongings out of your own pocket.
If you have a mortgage your provider may offer a home insurance policy that you can take out with your loan. Shop around before you accept this because it may not be the best deal.
Here is how to work out what home insurance policy you need.
Home insurance can be split into two separate policies:
Buildings insurance, which covers the bricks and mortar of your home
Contents insurance, which covers your personal belongings
You can buy both together in one combined home insurance policy, which can work out cheaper that buying them separately. Most insurers will offer a discount if you choose to buy both policies with them.
It is still worth comparing individual buildings and contents policies with different insurers because this could work out cheaper.
If you rent your property you are not responsible for insuring the building you live in, so you only need to look for a contents insurance policy.
When you apply for insurance you will be offered different extras you can add to your policy at an extra cost. These include things like:
Accidental damage cover
Legal expenses cover
Increased garden or bicycle cover
There are policies that include some of these benefits as standard, but others charge you to add them, so only add the things you might need to keep the cost down.
You can choose to pay for your home insurance policy in two ways: in monthly instalments or in one upfront payment.
If you can afford to pay all of your premium at once it will save you money because most insurers add interest to your monthly payments.
This can be between 5% and 10% APR depending on the insurer, for example:
If your annual quote is £200 and 10% APR interest is charged for monthly payments you would end up spending a total of £220 over the term (£18.33 each month).
When you buy a policy you need to make sure you get high enough cover limits for your buildings and contents, but if you have too much you will be paying more than you need to.
To make sure you only pay for the cover you need you should calculate:
The value of all your contents: You can do this by adding up the value of all your belongings; this guide explains how to go about it so you know how much contents insurance cover you need.
The rebuild value of your home: This is how much it would cost to rebuild your house from scratch, not its market value. Here is how you can find your rebuild value to get the right amount of cover for your buildings insurance.
When you apply for a policy try to match the cover as closely as possible to these amounts. Some insurers will let you set the cover level to the exact values you need.
The insurance excess is the amount you have to pay towards any claim you make.
Most home insurance companies let you increase the excess on your policy in exchange for a cheaper premium. This is because the amount they have to pay out for a claim will be less if you contribute more.
However, this means that your total costs could be more if you need to make a claim so always make sure the excess you choose is an amount you could afford.
This guide explains what excess you need to pay when you make a home insurance claim.
Making your home as secure as possible helps to prevent break ins, gives you peace of mind and can mean cheaper home insurance.
Install a burglar alarm: Having a working alarm can reduce your premiums, but make sure the model you have is approved by the insurer. Some policies insist it is on at all times, and your claim could be rejected if you are burgled when it is turned off.
Get the right locks: You should make sure all your external doors and windows have the correct locks. Some insurers specify what type of locks you should have so check the policy documents carefully to make sure you have the right ones.
Install a safe: If you have insured valuables under your contents policy, keeping them in a safe could lower your premium. Alternatively, you could choose not to insure them and reduce the cost if you are confident they will be secure from theft in a safe.
Join the Neighbourhood Watch scheme: Some insurers reduce your premiums if you are a Neighbourhood Watch member, because it could reduce the risk of your home being burgled. You can find your local Neighbourhood Watch and join up here.
Keeping your home secure will also reduce the likelihood of you needing to make a claim, which will help you build a no claims bonus.
For every consecutive year you hold a home insurance policy and do not make a claim you earn a no claims bonus.
The more years you can go without claiming, the lower your home insurance will cost, so it pays to make sure your home is protected against theft and damage.
There are other security measures you can take which may not directly affect the cost of your insurance, but will help reduce the risk of theft:
Keep expensive items like laptops out of plain sight
Do not leave a spare key hidden near your front door
Lock all your garden equipment away in your shed or garage
Put your lights on a timer if you are going on holiday so it looks like you are home
Install security lights
There are also some things you can do to make your home less prone to damage, including:
Fitting smoke alarms throughout your home
Insulating water pipes so they do not freeze in winter, which can lead to flooding
Removing any trees over ten meters next to your home
Keeping your home in good condition, for example keeping the guttering clear
Doing all of these things may not guarantee you will never need to make a claim, but they will reduce the risk of certain things going wrong and help you build up your no claims bonus.
This could reduce the cost of your insurance because tall trees could cause damage if they fell on your property during a storm. They can also increase the risk of subsidence if their roots grow underneath your home.
Most insurers will ask if there are any trees over ten meters near your home when you apply for a policy.
Protect your home and belongings for less by comparing home insurance policies to cover a range of property types and individual circumstances.