According to statistics published by the Association of British Insurers (ABI), home insurance claims shot up by a staggering 290% in the first quarter of 2018 principally as a result of the loss and damage caused by Storm Emma and the infamous “Beast from the East” in late February and March.
Increased payouts by insurance companies inevitably lead to increases in premiums – to recover those costs – but the current burden on insurance costs is further exacerbated by the effects of the 12% Insurance Premium Tax, argued the Telegraph newspaper on the 26th of January 2018.
Against this background of across the board increases, what might you do to save money on the cost of your essential home insurance?
- when prices are on the increase, it becomes more important than ever to shop around wisely – and that includes buying your home insurance;
- finding the best value for money, matching your precise needs and requirements to the products available, and securing a competitive price is a tricky exercise and one that may require the help and guidance of a specialist provider experienced in this sector of the insurance market;
- furthermore, a specialist broker is likely to have access to home insurance products available only through brokers’ specialist networks – thus increasing your chances of saving money on the cover you need;
Combine your building and contents insurance
- home insurance comprises two elements – building insurance and contents insurance;
- although you may purchase each type of cover separately, the majority of insurers offer discounts on the purchase of the two at the same time under a combined home building and contents policy;
- a combined policy also avoids any danger of your overlooking the renewal of the one or the other if separate policies have different dates during the year;
- diligent homeowners are typically aware of the importance of sufficient building insurance to safeguard their home, but may be tempted to overinsure the property on the basis of an inflated valuation – and therefore end up paying more than is necessary in insurance premiums;
- although the total building sum insured needs to reflect the possibility of a disaster resulting in the total loss of your home and the need for it to be completely rebuilt, you might want to pay close attention to the estimate of reconstruction costs – referring if necessary to the House Rebuilding Cost Index maintained by the Royal Institute of Chartered Surveyors (RICS);
- many householders tend towards underinsuring their home contents and leaving insufficient cover for the repair or replacement of damaged or lost items when it comes to making a claim – consider a room by room inventory of your contents, therefore, to ensure that the valuation is up to date;
- most insurers offer the convenience of paying your home insurance premiums in monthly instalments;
- with some providers, however, you may be paying for that cost of credit and may save money by paying the annual premium in one lump sum, when it falls due at the beginning of your cover;
Pay a higher excess
- different parts of your home insurance probably attract different rates of excess, depending on the type of claim you are making;
- but consider paying a higher excess in return for a discount on the price of the premiums you pay in return.
Increases in the average costs of home insurance premiums across the UK is never good news, of course, but there are still ways you might cut those costs and save money on the home insurance you arrange.