Tips for cheaper home insurance
source: www.myfinances.co.uk
Tuesday, 27 Jan 2009 11:40
With 2009 set to be a year of recession, everyone is looking to make cut backs.
But is home insurance, one cut too many? Or are there ways cut back the costs of cover for building and contents and not be left with an unfortunate bill come some domestic disaster.
Sarah Routledge looks at ways of cutting your home insurance bills.
With the British weather quickly changing from ice and snow to gale-force winds, this time of year is a good time to check your cover is up to scratch.
Failing to keep your house in good repair or leaving it empty for long periods may invalidate your policy, Steve Sweeney, head of home insurance at Moneysupermarket.com, warns.
"Safeguarding against the effects of cold weather is essential and therefore understanding the small print of your home insurance is too; there is no doubt homeowners would be shocked to discover burst pipes may not even be covered.
"Many of us will have resolved to understand our finances better in 2009, and being aware of your insurance policies is certainly part of that.
"Facing a situation where your pipes have burst and you are not covered would be a real blow to family finances. I advise homeowners to scour the small print of policies and contact their insurer if there are any uncertainties."
A home insurance policy is generally demanded by banks as a condition of the mortgage, and is often sold alongside the loan. Although it may be simpler to accept this policy, it is very likely you could find a cheaper deal by shopping around.
"The home insurance market is very competitive so by shopping around you could save significant amounts of money," says LV= spokesperson Emma Holyer.
"Even if you want to stay with your current provider, call your insurer to review the cover you have as it maybe that they can offer you a better deal than the one quoted in your renewal pack."
Linking buildings and contents insurance
Many insurers also offer free contents insurance with home insurance, but it is worth checking whether it is cheaper to buy the two separately.
It is also important to make sure you are not over-insured, Ms Holyer adds.
"Buy a policy from an insurer to allow you to choose the amount of contents you want covered.
"Some insurers offer a 'blanket cover' policy which includes cover up to a set amount. This can be more expensive than an individually rated policy.
And make sure you are not paying for the same cover twice, Ms Holyer adds.
"Check if you have personal possessions cover on your travel insurance policy. If you do, and also have it on your home insurance policy, it may be that you are paying for the same cover twice. Consider cancelling the personal possession cover element of your travel insurance."
Having said this, it is vital not to underestimate the cost of replacing your contents in the event of a flood or a fire.
"The value of a customer's home can soon add up to much more than they think," Phil Kennedy, business development director for Legal & General warns.
Legal & General has estimated that the value of the contents of an average three-bedroom home could easily be worth £40,000.
"Household insurance cover is not a luxury purchase. When home contents cover can be provided for as little as £10 to £20 per month, which represents good value, even when household budgets are being stretched," Mr Kennedy adds.
Legal & General has developed a home contents calculator, to help customers work out the amount of cover they need.
For those who want to be on the safe side, there are several insurers, including Halifax and Marks & Spencer who offer unlimited contents cover.
Ensuring insurance value for property is correct
It may also be worth re-evaluating how much your home would cost to re-build – many people estimate this wrongly, assuming it is much higher that it really is, which pushes up the premium.
According to research from Confused.com, spanning six months, ten per cent of consumers thought that rebuild cost and purchase price were the same, and 20 per cent thought that rebuild cost was higher than the initial building cost.
In fact, a semi-detached house, worth around £180,000 and measuring 742 square feet, with a garage, would cost £85,700 to rebuild if it was located in the south-east and £79,700 to rebuild if it was in the north-east, the comparison website says.
If you think you may be paying over the odds, the Association of British Insurers' rebuild calculator can help.
Be secure
Lowering your risk is another good way to cut your premiums, Norwich Union's Rebecca Holmes says.
"If you have the approved window and door locks, or if you live in a Neighbourhood Watch scheme, then there are savings there.
"A burglar alarm could also save you money," Ms Holmes suggests.
If you are considering adding extra security features to your home, ring your insurer and find out what discount you could be entitled to, and what the recommendations are.
Home Insurance & Home Security Systems
Tuesday, 27 Jan 2009 11:40
With 2009 set to be a year of recession, everyone is looking to make cut backs.
But is home insurance, one cut too many? Or are there ways cut back the costs of cover for building and contents and not be left with an unfortunate bill come some domestic disaster.
Sarah Routledge looks at ways of cutting your home insurance bills.
With the British weather quickly changing from ice and snow to gale-force winds, this time of year is a good time to check your cover is up to scratch.
Failing to keep your house in good repair or leaving it empty for long periods may invalidate your policy, Steve Sweeney, head of home insurance at Moneysupermarket.com, warns.
"Safeguarding against the effects of cold weather is essential and therefore understanding the small print of your home insurance is too; there is no doubt homeowners would be shocked to discover burst pipes may not even be covered.
"Many of us will have resolved to understand our finances better in 2009, and being aware of your insurance policies is certainly part of that.
"Facing a situation where your pipes have burst and you are not covered would be a real blow to family finances. I advise homeowners to scour the small print of policies and contact their insurer if there are any uncertainties."
A home insurance policy is generally demanded by banks as a condition of the mortgage, and is often sold alongside the loan. Although it may be simpler to accept this policy, it is very likely you could find a cheaper deal by shopping around.
"The home insurance market is very competitive so by shopping around you could save significant amounts of money," says LV= spokesperson Emma Holyer.
"Even if you want to stay with your current provider, call your insurer to review the cover you have as it maybe that they can offer you a better deal than the one quoted in your renewal pack."
Linking buildings and contents insurance
Many insurers also offer free contents insurance with home insurance, but it is worth checking whether it is cheaper to buy the two separately.
It is also important to make sure you are not over-insured, Ms Holyer adds.
"Buy a policy from an insurer to allow you to choose the amount of contents you want covered.
"Some insurers offer a 'blanket cover' policy which includes cover up to a set amount. This can be more expensive than an individually rated policy.
And make sure you are not paying for the same cover twice, Ms Holyer adds.
"Check if you have personal possessions cover on your travel insurance policy. If you do, and also have it on your home insurance policy, it may be that you are paying for the same cover twice. Consider cancelling the personal possession cover element of your travel insurance."
Having said this, it is vital not to underestimate the cost of replacing your contents in the event of a flood or a fire.
"The value of a customer's home can soon add up to much more than they think," Phil Kennedy, business development director for Legal & General warns.
Legal & General has estimated that the value of the contents of an average three-bedroom home could easily be worth £40,000.
"Household insurance cover is not a luxury purchase. When home contents cover can be provided for as little as £10 to £20 per month, which represents good value, even when household budgets are being stretched," Mr Kennedy adds.
Legal & General has developed a home contents calculator, to help customers work out the amount of cover they need.
For those who want to be on the safe side, there are several insurers, including Halifax and Marks & Spencer who offer unlimited contents cover.
Ensuring insurance value for property is correct
It may also be worth re-evaluating how much your home would cost to re-build – many people estimate this wrongly, assuming it is much higher that it really is, which pushes up the premium.
According to research from Confused.com, spanning six months, ten per cent of consumers thought that rebuild cost and purchase price were the same, and 20 per cent thought that rebuild cost was higher than the initial building cost.
In fact, a semi-detached house, worth around £180,000 and measuring 742 square feet, with a garage, would cost £85,700 to rebuild if it was located in the south-east and £79,700 to rebuild if it was in the north-east, the comparison website says.
If you think you may be paying over the odds, the Association of British Insurers' rebuild calculator can help.
Be secure
Lowering your risk is another good way to cut your premiums, Norwich Union's Rebecca Holmes says.
"If you have the approved window and door locks, or if you live in a Neighbourhood Watch scheme, then there are savings there.
"A burglar alarm could also save you money," Ms Holmes suggests.
If you are considering adding extra security features to your home, ring your insurer and find out what discount you could be entitled to, and what the recommendations are.
Home Insurance & Home Security Systems
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