We all need house insurance, so here are 12 easy steps to help you pay less
1. Insurance premium tax is rising from March 1. At present you pay a 6 per cent tax on home insurance premiums, but this will rise to 9.5 per cent. If your insurance expires in March, it may be worth renewing early.
2. You can try to cut your costs by shopping around early. Many insurers will hold quotations for 90 days; some insurers will even allow you to buy your policy up to three months in advance. That way you can lock in a cheaper price. However, shop around again just before you buy to make sure premiums haven’t fallen.
3. Insurers tend to offer automatic renewal but this is unlikely to be the best price. Insurers rarely reward loyalty; the best deals are reserved for new customers. If your insurer will not reduce your renewal premium — you should always haggle — look for a better deal. Bear in mind that it may be risky to skimp on cover to save money: make sure that the new policy offers the same level of cover, excess and add-ons.
4. If you’re thinking of switching, save yourself some hassle by asking your existing insurer if it will guarantee to beat any quote offered to you by a rival. Try to pay the premium upfront, in one lump sum. Insurers charge hefty interest rates if you pay monthly. If you can’t afford to pay upfront, consider putting the lump sum on a 0 per cent credit card to spread the cost. Before you pay, check cashback websites such as Quidco or TopCashback to see if you can get paid for taking out your policy.
5. Before you commit to a policy, check the excess. Make sure it isn’t so high that you will be put off making a claim. Equally, your premiums will be more expensive if your excess is low. Take the time to find the right balance. Also, make sure you read the policy’s small print. Little rules could stop you making a claim, and these can change regularly. For example, if you like to take long holidays, check how long your property can stay empty. Most insurers won’t cover homes left for more than 30 days.
6. Don’t overvalue your home when applying for buildings cover. Property values may be soaring but your insurer is interested in the cost of rebuilding your home, not what you can sell it for. Putting in the wrong figure could mean you end up paying too much for your insurance. The Association of British Insurers has a rebuild calculator on its website.
7. Don’t undervalue your belongings when applying for contents insurance. Get it wrong and when you make a claim you won’t receive enough to replace all your belongings. List all of your things by room (include clothes and food) and estimate their value on a new-for-old basis. Tot it up for an accurate idea of the value.
8. In your zeal to achieve a cheaper deal, do not let your policy lapse. If there is a gap in your insurance you run the risk of having a future claim rejected. The insurer could refuse a claim if there is any chance that the loss or damage occurred when you were uninsured.
9. You can cut your premiums by upgrading your locks. Insurers want your home to be as secure as possible, so the better your locks, the cheaper your premium will be. Try entering different lock types when searching for quotes, you may find the saving more than covers the cost of better locks.
10. Fit a burglar alarm. It is cheap to do it yourself, but you’ll make bigger savings if the alarm is fitted and maintained professionally. Also, make sure you accurately describe your alarm, otherwise future claims could be rejected.
11. Do you have anything particularly expensive in your home? Valuables worth more than £1,000, such as laptops, art or jewellery, should be specified on your insurance policy. Make sure you have proof of ownership, such as a receipt or photograph. As well as insuring everything in your home, consider all the things that you take out with you, such as laptops, jewellery and gadgets. Most policies have the option to cover things outside, too.
12. Check your policy to see if it insures mobile phones. If it does, you can cancel any expensive phone insurance that you have. Also, if you have small children and fragile valuables you may want to purchase accidental damage cover to ease the pain, should things get broken.