Home insurance policies can be confusing but they’re too important to buy without a little research. Fire, theft or water damage can happen to any home so you need the right level of cover – and with our top tips, you can save money too.
1. Get jargon-savvy
Know the difference between buildings and home insurance. Buildings insurance covers loss or damage to the structure of your home – walls, permanent fixtures and fittings (e.g. bathroom suites), gates, patios and even garages, depending on the policy. If you own a house, buildings insurance is important. If you’re a leaseholder, the freeholder will have the policy which you’ll pay for via ground rent, but if you’re renting, your landlord should have it covered. If you’re a freeholder, you need to have buildings insurance.
What is important for everyone is contents insurance for loss or damage to household goods and other possessions such as clothes, TV, furniture – put simply, anything you can take when you leave. You might be able to double up by including items like laptops and bicycles so they’re covered out of the house e.g. when you’re on your holiday.
2. Never automatically renew
Before you renew with your existing insurer, use a comparison website like comparethemarket.com, confused.com, gocompare.com, moneysupermarket.com and uswitch.com to see current quotes – make sure you click through to the insurer’s own website to double-check.
It’s also worth calling Direct Line and Aviva as they’re not included in comparison site results. You should also call your car insurance provider because if they also provide home insurance, you may get a better deal. And before renewing, don’t assume you have the same requirements – do you have a new laptop or did you get rid of an expensive gadget? You don’t want to be over-insured as it will cost you more, but if you under-insure, items might not be protected, your policy could be cancelled and it could affect future premiums.
3. Think about what you need
The type of items covered (and not covered…) and the level of cover is important so take time to read the policies – if you needed to make a claim, it could be a false economy to simply pick the cheapest quote. Some policies may exclude accidental damage to items, which could be a level of cover you require.
Check that any special circumstances or features are covered, especially if you’ve only entered basic information to generate a quote. Look at the excess too, which is the first sum you’d pay towards a claim. You may be able to reduce the quote by increasing the excess, although make sure it’s affordable if you did need to claim.
4. Plan ahead
Don’t leave it to the last minute to renew as being under pressure means you’re less likely to read the policy! Some insurers will honour a quote for up to 90 days so you can look around in the meantime and go back to that quote if you want – as long as your details haven’t changed, of course.
Many insurers guarantee to beat your renewal quote as well, so if you spot any adverts, it’s worth giving them a call or haggling with your current or potential new insurer.
5. Improve your home security
Be as low-risk as possible to benefit from cheaper home insurance. 5-lever mortice locks for external doors and two bolt locks on windows are recommended as is an approved burglar alarm – these can go a long way towards a better quote. Being part of a neighbourhood watch scheme can also reduce premiums.
6. Prevention is better than the cure…
No-one wants the stress of a claim so decrease your chances. Have a (working) smoke alarm fitted and check it weekly and ensure you don’t have dodgy electrics such as damaged wires or overloaded plug sockets. Cook with care and snuff out cigarettes, candles, oil burners etc. Lock doors and windows when you go out, and if you’re away, set a variable-hour timer for lamps and ask someone to check your house.
It can be worth insulating pipes and tanks for freezing weather as burst water pipes are a common reason for home insurance claims. Claims push up your home insurance in subsequent years so building up a no-claims record is important.
7. Don’t over- or under-insure
Working out your cover is important. Don’t base buildings insurance on the amount your house is worth as you’ll be over-insured and paying more than you need. What you need to cover is how much it would cost to rebuild it and of course extras, for example, somewhere to stay during the rebuild. Use the Association of British Insurers’ calculator as a guide.
With contents insurance, it’s important not to under-insure as if you do claim, you want the insurer to pay out. Where possible, add up everything from clothes and jewellery to kitchen gadgets and furniture. Many policies offer a ‘new for old’ cover while ‘indemnity cover’ (which is cheaper) only covers the current value of any items. Clothing and household linens are exceptions as insurers take ‘wear and tear’ into account. You may need to declare very high-value items.
8. Be honest
Whatever you decide, be honest about any special circumstances, for example, if your house is in an area prone to subsidence or flooding or if you’ve made previous claims. If you don’t tell them and need to make a claim, your policy could be invalid, which would cost a lot more than the saving made by omitting information.
9. Check how you pay
Monthly payments can seem tempting when buying insurance, but do the calculations first as monthly payments can often work out more than paying for it in full. If you can’t afford to do that, apply for a 0% interest credit card to give you some breathing space, but pay it off before the 0% deal expires.
10. Legal cover: yes or no?
Not everyone opts for legal cover but be informed before deciding whether you do or don’t need it. It’s for legal disputes such as personal injury or death e.g. if someone is injured on your property, and for situations such as property disputes or contract disputes which come about when you sell your home. Some people already have legal protection in their policy and don’t realise it while others who might need it don’t have it, so you decide what you need then choose a policy that covers you.