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How to Keep Down Home Insurance Costs

By: Thomas Muller - Updated: 31 Dec 2012 | comments*Discuss
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In times of financial hardship the costs of home insurance can seem like a greedy strain on resources, but there are many ways to relieve its bite.

How Essential is Home Insurance?

When the pennies start to pinch it is natural to start reviewing how essential your current outgoings really are. Although universally accepted as an essential requirement for any British home owner, it has even led people to question the need for home insurance at all, especially if they’ve never made a claim. But is it really worth the gamble?

Home insurance is certainly expensive, but with recent research revealing that homeowners spend an average of £180 a year more than they need to, it needn’t be so. Therefore instead of abandoning insurance altogether, a much more sensible and cost effective option is to hunt down the many savings that are out there waiting.

Shop Around For the Best Deal

Firstly, shopping around for the cheapest policy to suit your requirements is strongly recommended - how much insurers charge for the same cover can vary considerably. Brokers and online comparison sites, such as Confused.com and MoneySupermarket.com are willing to assist you in finding the best deals.

Although this may seem like a fairly obvious tack, a recent market research survey found that 70% of home insurance customers –around 11.7 million people - only bother getting one quote when arranging cover.

Although many insurers offer a discount if you buy both your buildings and contents insurance together, this isn’t necessarily the cheaper option. AA Insurance claim that 2 in 5 households could save money buying cover separately rather than opting for the combined deal.

Choose the Right Policy

When choosing the type of cover you want it is advisable to only opt for what you really need. To do this it’s a good idea to compile an inventory of all your belongings, and then add some extra for any items you may have overlooked.

Unless your home is bursting at the seams with expensive goods, it is strongly advised against going for policies that offer so-called ‘unlimited’ contents cover as you will likely end up paying over the odds for your insurance.

To reduce the cost of your cover, one option is to volunteer for a higher ‘excess’ - the portion of any claim that you pay yourself. What’s more many insurers reward their customers with no-claims discounts of up to 30%.

Improve Security and Safety Features

Another good way of reducing your overall premiums is to invest in security and safety features for your home. By upgrading locks, buying security lights, a burglar alarm, and fitting smoke alarms and fire extinguishers, you are effectively making your home a lower risk for the insurer, and as a result your responsible efforts will be rewarded with cheaper insurance.

Regularly Review your Policy

Once you have snagged a good deal on your home insurance don’t expect that to be the end of it. Insurers not only don’t reward the loyalty of their customers, they penalise their inaction by introducing annual increases that veer wildly from the underlying costs. It is therefore vital to regularly review and renew your insurance so that you are always getting a good deal.

Instead of blindly renewing your policy, you should always shop around for a better deal from an alternate provider. If you do find a better quote then before you do jump ship it is worth presenting your findings to your existing insurer because you may find that, when pushed, they will reward loyalty and knock an appropriate sum off your renewal quote.

Be Rewarded as a New Customer

As insurers are generally much keener to invest their marketing coffers in enticing new customers than in keeping their existing ones happy, there’s no harm in taking advantage of their warm welcoming nature by regularly becoming a new customer. If you sign up with one insurer to take advantage of their attractive introductory price then there’s no rule against cancelling the cover when the premium costs inevitably rise, and taking up a new insurer on their introductory offer.

You don’t even need to move to a different provider to enjoy the benefits of being a fresh new face. There have been many instances where policy holders have cancelled their policy with an insurer only to reapply again to take advantage of their introductory offer.

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