Tips to get cheaper home insurance
There are ways to help reduce your home insurance premium, including fitting sturdy locks on doors and windows. Getting the right level of cover should be top of your list, but these tips might help lower the cost.
When an insurer works out if they can offer you cover, and the premium you should pay, they’ll consider a few factors. Some things you can’t do much about, like crime levels in your street, your past claims, or when your property was built.
Others are wider considerations that affect what insurers charge everyone, including government schemes like 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 setup
You’re ten times more likely to be burgled if you don’t take basic security measures for your property, like 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, or other deterrents like security cameras. 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 of house fires in Britain, a battery-powered smoke alarm doesn’t work, whether through missing or faulty batteries, or being positioned in the wrong place. If you told 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 test them often, so you know the smoke sensor and source of power work.
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 deadlocks that conform to British Standard BS3621, and 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.
New home insurance customers are usually offered better deals than existing customers, so shopping around before your policy automatically renews each year can save you money. In 2018, 6 million home and motor insurance customers would have saved £1.2 billion if they hadn’t been hit with the loyalty penalty and paid the average price instead.
Comparison sites are an easy way to compare the price of the cover you need from different insurers. You can also use a broker or, if it’s a renewal, negotiate the price with your insurer. If you have a mortgage, you don’t have to buy home insurance through your provider, unless it’s part of the terms and conditions.
New rules coming into force in January 2022 are set to end the loyalty penalty on existing customers for home and car insurance. This means insurers won’t be able to charge existing customers more than new customers when they renew. Shopping around for a better deal will still be worthwhile, though, as your price could still go up if you’ve made a claim or made changes to your policy.
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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 offered 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 the 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 ask a chartered surveyor to work this out for you.
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 may increase your premiums. This is only when two insurance policies cover the same thing, 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 lower your premium. Compulsory excess is set by your insurer, 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 be charged a different excess amount for the type of damage, such as £1,000 for subsidence or escape of water.
If you have a combined buildings and contents insurance, check if a claim on both parts of the policy after a fire, for example, would mean two excess payments.
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). This can usually be built up for up to five years, and 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 upfront, 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, they 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’re 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, like 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, with expertise in insurance, wills and probate, and all things health. Read more