Tips To Get Cheaper Home Insurance
There are several ways to help reduce your home insurance premiums, including improving your security set-up and not auto-renewing. Of course, getting the right level of cover should be top of your list, but follow our tips and you could also lower the cost.
When an insurer works out if it can offer you cover, and the premium you should pay, it will consider a few factors. Some things you can’t do much about, including crime levels in your street, any past home insurance claims, or when your property was built.
Other wider considerations can affect what insurers charge everyone, including government schemes such as Flood Re, which helps keep premiums down for people in flood-risk areas, the current rate of claims, rises in insurance premium tax, and the changing cost of labour and repairs over time.
But some things are in your hands. Here are some of the steps you can take to help reduce what you pay for buildings and contents insurance.
Have a good security set-up
You are 10 times more likely to be burgled if you don’t take basic security measures for your property, such as having strong locks and an intruder alarm, according to a report by the Home Office and Association of British Insurers. Good security can make it harder for thieves, help you meet your insurer’s requirements, and potentially reduce your premiums.
Here are some of the main ways to boost your level of security:
Your insurer may offer a discount if you have a burglar alarm, and other deterrents such as security cameras can help reduce your property’s appeal for an intruder. While you could opt for the latest smart security system or monitored alarms with automatic alerts, a burglar alarm doesn’t have to be expensive to be looked on favourably by insurers, or to act as a deterrent.
Make sure you leave the alarm on every time you leave the house, and check if your insurer also expects it to be activated when you’re asleep at night. Make the alarm-bell box visible, to help put off would-be burglars.
Depending on your postcode, having a burglar alarm may be a condition of your cover, so always check. Your insurer may also ask if the alarm system has been installed or certified by the National Security Inspectorate (NSI) or Security Systems and Alarm Inspection Board (SSAIB).
In more than a third (39%) of house fires in England battery-powered smoke alarms didn’t work, according to data from the Home Office for April 2020 to March 2021. Reasons included missing or faulty batteries or, most commonly across England, Wales and Scotland, smoke alarms not being positioned close enough to the fire.
If you tell your insurer you have smoke alarms, but they fail to sound during a fire it puts your safety at risk and may invalidate your claim.
Fit at least one on each level of your home and, ideally, in every bedroom. Test them often, so you know the smoke sensor and source of power work.
From February 2022, homeowners in Scotland need to install interlinked smoke alarms on ceilings, including a heat alarm in the kitchen. A heat alarm warns of an increase in temperature but won’t be triggered just by cooking fumes.
With an interlinked system, if one alarm sounds, the others will too. You can find more guidance about this on the Scottish government website.
High-quality window and door locks
Your insurer will ask about the type of locks you have on outside doors, including patio doors and windows. The gold standard are sturdy five-lever mortice deadlocks that conform to British Standard BS3621, and key-operated multi-point locking systems, but your insurer will provide a list and in most cases, images of the lock types, if you’re unsure. Internal locks for windows and skylights should be key operated, with anti-lift devices on sliding patio doors.
Always double-lock doors and remove the key, keeping it out of sight, somewhere safe. And don’t leave keys under a plant pot or a doormat, as that’s the first place a would-be-thief would look, and it may invalidate your claim.
Don’t assume auto-renewal offers the most competitive price
New rules to end the loyalty penalty on existing customers for home and car insurance came into force in January 2022. This means your home insurance provider can’t charge you more than new customers for the same cover when your policy renews.
The Financial Conduct Authority (FCA) says this will save consumers £4.2 billion over the next 10 years. So it looks like good news if you’ve paid over the odds by not switching in the past.
Even so, letting your policy auto-renew doesn’t necessarily mean you will be getting the most competitive price on the market. For example, your premium could still go up if you’ve made a claim or need to change your policy. And other factors, such as when and how you buy a policy, and how individual insurers decide how likely you are to make a claim, will affect the premium you are charged. You may also want to change insurers for other reasons, such as getting better customer service.
So if price is important to you, you’ll probably still want to shop around for a better deal before your policy automatically renews each year.
Comparison sites like NerdWallet are a quick way to compare the cover you need from different insurers, or you can approach an insurer directly. You can also use a broker or, if it’s a renewal, you can ask your insurer to review your premium. If you have a mortgage, you don’t have to buy home insurance through your provider, unless it’s stated in the terms and conditions.
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Overinsurance means paying too much for the cover you actually need. One way of doing that may be adding extras like accidental damage cover without considering if the standard cover is enough.
Some insurers include limited cover for accidentally breaking built-in fixtures, like washbasins or windows. If you’re accident-prone or have children, this extra cover may make sense for you, but always check the policy documents to see what’s covered and what’s excluded first.
While you don’t want to risk being underinsured, don’t overestimate the amount of buildings insurance and contents cover you need. The rebuild cost of your property isn’t its current market value; it’s the cost of rebuilding your property from the ground up, which is usually a lower amount. You can use the Association of British Insurers’ rebuild cost calculator, or hire a chartered surveyor to work this out for you. If you’ve just bought your home, you should be able to find its rebuild cost on your mortgage valuation or deeds.
With contents insurance, if you overestimate the value of your belongings, your premium will likely be higher than it needs to be. So take the time to walk through rooms and check lofts and garages, doing the sums as you go along. You’ll want as accurate a figure as possible for the full replacement cost, so the total cover amount isn’t more or less than it needs to be.
If you’re double-insured for the same thing – for example, if one contents insurance policy auto-renews and you take out another contents insurance policy for the same property without cancelling the other – as well as paying two premiums unnecessarily, it can cause problems when you make a claim.
Making a claim on both would be considered fraud, but even if you make a claim on one policy, the two insurers may decide to split the cost of your claim between them, which will likely cause extra admin and delays, and it may increase your premiums. This is only when two policies cover the same insurance, though. So having buildings and contents insurance with different providers is fine, as they cover different things.
Some packaged current accounts include home emergency cover as a benefit. So check if you already have it with your bank, and the level of cover it offers, before adding it to your home insurance.
Consider your excess
Generally, the higher your voluntary excess (the amount of each insurance claim that you agree to pay), the lower your premium. Your insurer sets compulsory excess, and voluntary excess is what you agree to pay on top of that. So with a £200 total excess, a £1,000 claim for a spoiled sofa would reduce the payout to £800.
If you decide to increase your voluntary excess amount, make sure you can afford the reduced payout. You may have to pay a fixed amount for certain types of damage – for example a compulsory excess of £1,000 for subsidence and £450 for escape of water is not unusual.
With a combined buildings and contents insurance policy, check if a claim on both parts of the policy after a fire, for example, would mean two excess payments or just one.
Build your no-claims discount
If you don’t make a claim on your home insurance for a year or more, you may be offered a no-claims discount (NCD). The longer you go without a claim, the greater the savings might be. It’s also usually possible to take your NCD with you if you switch insurers. It needs to be continuous cover without any breaks, though.
Wanting to keep your NCD shouldn’t put you off making a valid claim, especially for major damage or loss. After all, that’s why you took out home insurance in the first place.
But you might want to weigh up if it’s worth replacing something relatively low cost that’s damaged without making a claim, to avoid losing your NCD and bumping up your premiums. That said, making a claim on some add-ons, like home emergency cover, may not affect your NCD, but this will depend on the insurer, so always check.
If you have separate buildings and contents insurance, a claim on one policy won’t usually affect your NCD for the other policy.
Pay annually, not monthly
Many insurers offer the option of either paying home insurance premiums up front, or spreading across monthly payments, including an initial deposit. Though this isn’t affordable for everyone, paying the premium in one go could save you money. Insurers usually charge an annual percentage rate (APR) on monthly payments, which will end up costing you more.
When you compare home insurance quotes, you’ll see the difference in total cost between annual and monthly payments, so you can work out what’s manageable for you.
Combine your cover
If you need buildings and contents insurance, you don’t have to get them both from the same insurer, but it could be cheaper if you do. It may also make life a bit simpler if you need to make a claim on both after damage to your home and contents.
The average combined buildings and contents premium, according to the Association of British Insurers, is £314, with a standalone buildings policy averaging £250 and contents costing an average of £128 per household.
Look out for loyalty discounts, too. If you already have a policy with an insurer, it may offer you a multi-product discount if you take out another policy with them. Bundles are also available for home and car insurance, where they are two separate policies, but you get a discount when you buy them together.
Don’t always assume that the cheapest home insurance is the best one for you, though. It should offer the right level of cover for your property and belongings, and you might want to consider other factors – for example, what customers say about their claims handling and customer service.
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Holly champions clear, jargon-free writing. She’s been creating finance content for leading organisations for over 10 years. Read more