2017 saw some of the biggest increases in the cost of home insurance premiums for some time, reports the Consumers’ Association’s Which? magazine. Prices rose by an average of more than 8% over the previous year – or nearly three times the rate of inflation for the same period.
Despite those rising prices, if you own your home, you are still almost certain to need home insurance – and if you have a mortgage, your lender is going to insist on it. More than ever, therefore, you might be looking to save money on this essential insurance product.
How might you do it?
- for all the increase in average prices, premiums for home insurance vary widely;
- that makes shopping around a sensible precaution – so that you match your precise needs to the huge range of options available, at the most competitive rate;
- but that shopping around is likely to be far more effective – and certainly more convenient – if you call on a specialist provider of home insurance to do the searching for you;
- when looking around for such a provider, take note that some are likely to offer special offers and discounts;
- some might enter your name into a prize draw, for example, whilst others may grant discounts on any second policy you take out with the same insurer or if you refer a friend or member of the family to them – some might even offer all of these;
Combined building and contents insurance
- home insurance typically comprises two elements of cover – for the structure and fabric of your property and for its contents;
- although you may buy each one separately, discounts are typically available if you buy a combined building and contents policy from the same insurer – thus helping you save money on the cost of your home insurance;
- although you might be offered the option of spreading the cost of your home insurance in equal monthly instalments throughout the year, it is invariably cheaper to pay the annual premium in a single amount upfront;
- that way, you avoid the administration or credit charges applied when you opt to pay in instalments – the Money Advice Service suggests that an instalment plan might cost you as much as 6% more;
- the total building sum insured needs to be sufficient to cover the cost of completely rebuilding your home if it is destroyed in some incident, but beware of the common mistake of placing an unrealistically high valuation on it and over-insuring – you end up paying more in premiums than you need;
- on the other hand, make sure your contents are not underinsured by conducting a meticulous room by room valuation of all of its contents;
Pay a higher excess
- different parts of your home insurance are likely to attract different rates of excess, depending on the type of claim you are making;
- but it is still possible to agree to pay a higher excess and win a discount on the price of the premiums you pay in return.
Although the average price you pay for your home insurance may have increased – along with much else – it remains possible to make savings on this essential safeguard for your home.
*This is a collaborative post.