Last Updated on October 22, 2020 by Emma
Let’s get straight to it; my top tip for saving money on your home insurance each year is to use a price comparison site to make sure that you get the absolute best price for the level of cover that you need.
Sounds pretty straightforward? Well, yes it is, but alongside this obvious money-saving hack, there are many less well-known tips to save money on your home insurance. Read on to find out more!
Disclaimer: This article may contain affiliate links. If you decide to use them, my blog may earn a small commission at no additional cost to you, which helps to fund more helpful articles for you to enjoy. Nothing in this article constitutes financial, or other, advice. These are my views and the results of years of research, testing and learning.
Tips To Save Money on Home Insurance
Don’t Say Yes to the Cover From Your Bank Without Shopping Around
When you take out a mortgage with a financial provider, they LOVE to upsell you to building and contents insurance. However, you risk paying over the odds unless you shop around for the best deal first.
Use a Price Comparison Site
Price comparison sites make finding the right deal so much easier. You input your details once, and they will show you a list of all the providers who can cover you, and their respective premiums, so it’s super simple to find the best deal.
When you’ve selected your favourite policy, the comparison site will take you through to the insurance provider’s website. At this stage, it is essential to check that the policy contains everything you are expecting before you go ahead and purchase. In many countries, such as the UK, you are entitled to a ‘cooling-off period’ after buying a home insurance policy in case you have second thoughts, but it’s easier to do your due diligence before you purchase it.
Some of the top price comparison sites for home insurance in the UK include:
If you can make the time, you can also test out your favourite quote by going directly to the cheapest insurer, and see what quote they give you. It’s possible that they may offer you some additional benefits for the same price as the comparison site. It’s essential to use the same details, such as your job title, to be able to compare the two quotes on a like-for-like basis. Even a small change in job title can have a material effect on your premium.
Get Quotes From Insurers Who Don’t Use Comparison Sites
Some home insurance providers do not appear on price comparison sites, so if you want to thoroughly shop around to get the best deal then you will need to go to them directly. Some of the big names who only sell directly to customers are:
- Direct Line
- Adrian Flux
Don’t Overestimate the Value of Your Possessions
It can be tricky to know how to accurately value your possessions when you are seeking a home insurance quote. An excellent way to do this is to physically walk around each room in your house noting down the items of highest value and what they are worth approximately. Remember to include high-value items that may be out of sight such as jewellery, or high-value items you have stored in the loft.
Confused.com offers a useful calculator for estimating the value of your home contents, called the Contents Calculator.
By selecting a realistic value for your possessions, and not an inflated value, you are more likely to receive lower premiums.
At the same time do not artificially lower the estimated value of your contents because if you need to claim on your policy, you will not be in a position to replace all of your possessions if you are underinsured.
Research from Admiral found that the average value of home contents ranged from £21,112 for a one-bed flat to £45,008 for a four-bedroom house.
Don’t Double Insure Your Possessions
When deciding on your home contents insurance be careful not to include items that are covered by another policy. For example, if your bank account comes with free mobile phone insurance, there is no need to insure it twice. Alternatively, you can cancel your other policies and get all the cover you need through your home contents policy.
Get a Quote for Adding Out of Home Insurance Cover
You’ll often save money by adding ‘out of home’ cover for your possessions rather than having a separate policy for this.
Pay In Full Rather Than By Instalments
Most home insurance providers will give you the option of paying your home insurance as an annual premium or by monthly instalments. Paying in full will typically save you a significant amount of money, so if you have the cash, it’s worth considering.
If you don’t have the money available to pay in full this year then consider:
- Putting the payment on a zero per cent credit card that you repay before any interest is due. Caution: this method is only suitable if you have the discipline to pay off your credit card in full before any interest is due, or you may end up spending more than the instalment option would have cost you.
- Start saving up for next year’s premiums by setting a budget for your spending and putting aside a specific amount of money each month. This method works well if you do not have interest-bearing debts. If you do, you may be financially better off if you focus on them first. To find out more, read How to Pay Off Debt Quickly: Top Tips.
Input an Accurate Rebuild Cost Estimate, Not a Guess
When insurers ask you for the amount it would cost to rebuild your home if the worst happens, how do you know what to put? Overestimating will see you paying over the odds for the policy, while underestimating will leave you with a massive problem if you ever need to claim on your policy for a rebuild.
Thankfully the BCIS Calculator is here to help homeowners in the UK who are looking for a reliable rebuild cost estimate.
Opt For a Higher (But Still Affordable) Excess
Your excess is the amount you voluntarily pay on your home insurance policy before support from your insurer kicks in. The higher the voluntary excess you are willing to pay, the lower your insurance premium will generally be. Price comparison sites will often let you model for different excess levels. However, though the cost savings of a high excess can be tempting, it’s essential to pick a voluntary excess that will be affordable for you if you need to claim.
Increase Your Home Security
Insurers will see your home as a lower risk if you have an alarm system installed that you use consistently. The savings you’ll make on your policy may not pay for the cost of the security system, so consider whether you will gain additional peace of mind from the security system or not.
You could also consider a home security app that alerts you when there are visitors at your door, enables you to speak with them, and allows you to switch lights on and off when you are away to create the impression you are at home. This system could deter burglars, saving you grief and money.
Install Secure Doorlocks
Insurers in the UK prefer homes to have locks that conform to British Standard BS3621, which they consider to be high quality and secure.
Combine Buildings and Contents Policies
An insurance provider may give you a discount if you buy both your home contents and buildings policies from them. The price comparison site you select should help you to identify these savings.
Do the Maths Before Claiming
If you experience an issue at home, calculate how the cost of putting the situation right yourself compares to claiming through your home insurance once you factor in your excess and the costs of losing any no claims bonus. You may also find that your home insurance premium increases in the years following a claim.
Remember to Update Your Policy if Your Situation Changes
Your insurer might charge you to update your policy for changes to your property (such as home improvements), or if you make a significant purchase, begin running a business from home or take in a tenant. While this extra fee could be unwelcome, the cost of not updating your details will be much higher if you need to claim and then find your insurance is not valid because you have failed to disclose vital information.
What Are Your Experiences With Home Insurance?
Have you found a way to get a great deal on your home insurance?
Have you been penalised for claiming?
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