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Home Insurance: How To Spend Less

Home Insurance! Insuring your home can be challenging and costly if you do not know exactly what you are doing.

In contrast, not insuring your home can be even more costly. The frugal homeowner will be looking to strike a balance between affordability and necessity. Anybody looking to save money around the home will almost certainly assess their insurance needs. That may make critical cuts that have a severe impact further down the line.

Insurance might be new to you – in our article The Ultimate Guide to Saving a Deposit for a House. We explained how you may not have had to pay tax, insurance or maintenance whilst saving for a home. This is true if you were living with parents or friends. But they will have had to cover the insurance and as a tenant or homeowner, you will too. The average UK home has around £35,000 worth of contents. Yet six million do not have any cover at all. It is a dangerous gamble to take, and one you do not need to. All you need to do is read our guide to spending less on your household insurance. So you can be frugal and covered at the same time. We have a four-point plan to help you get the best deal you possibly can.

Shop Around

It may seem obvious, but shopping around for a better deal is a great way to save money. The Guardian suggests using a price comparison website to do just that, but we would recommend using a couple. Those sites often do not have all the available deals. So using two or three and then picking the best is a great way of ensuring a good deal. Also, make sure you go back to your current insurer with the quote to beat. To give them the chance to give you a good deal too.

Combine Cover

Buying a combined policy is a good way to cut down on costs, and there are plenty out there. You will most likely find a provider doing buildings and contents for example. Which as a homeowner is a good option. If you rent your property, it is unlikely you will need buildings insurance. That would be down to the owner, so this saving is for people who own their own home.

You can also get policies, which cover you against a range of breakdowns to essential services, such as the plumbing system. If you want to take out such a policy, you will likely find you can again combine cover. For instance, HomeServe’s plumbing and drainage cover shows that policies can be tailored to suit a homeowner’s specific needs. Such as adding in protection for electrics or the boiler. These policies tend to be cost-effective and offer wide-ranging peace of mind.

Pay Annually

If the option is afforded to you, try to pay your insurance bill annually, rather than monthly. This is because paying monthly sees your insurer adding interest to the total, lifting the overall amount you pay significantly. This can be anywhere from 5% to 10% APR depending on the company. This means if your policy is £200 and you get charged 10%. You will pay £20 over the course of the calendar year.

Build Up A No Claims Bonus

Much like car insurance, a no claims bonus can drastically reduce the payments you have to make. An insurer rewards you for not making a claim, so protecting yourself around the home is sensible. This means simple practices, such as not leaving laptops in sight of windows. As well as not leaving a spare key hidden by the back door and locking garden equipment away at night. By ensuring you do not become an easy victim of crime. You reduce the risk of making a claim and thus, reduce your overall premiums year on year.