Whether you consider the cost of insuring your home to be cheap or otherwise is likely to depend on a whole host of considerations, such as the type of home you own, its location, its market price, the age and value of its contents and the level of cover you require. In other words, cheap is a relative term and one that is likely to vary from one individual to another – you might think it cheap; your neighbour might think otherwise.
With that in mind, however, the following might serve as a few general tips on arranging cheap home insurance, based on things you can do to influence the cost of the cover:
- some insurers might set great store by customer loyalty – the more policies you have with them, the better your chances of negotiating a competitive rate. On that score, it may be worth considering bundling together not only your home building and contents insurance, but also using the same insurer as the one that arranged your car insurance or any other type of cover;
- it might seem like a statement of the obvious, but it is likely to be worth paying only for the cover you actually need;
- clearly, you may want to avoid being under-insured, because in the event of claim the settlement is unlikely to cover the cost of repairs or replacement. On the other hand, you may also want to avoid being over-insured, where the total sum insured exceeds the value of your home and its contents;
- in the case of building insurance, the amount insured typically represents the worst case scenario involving its total reconstruction. Since this is going to reflect current rebuilding costs – rather than the market value of your property – you might want to consult an independent valuer, such as the Building Cost Information Service;
- as far as your contents are concerned, you might want to make a careful inventory on a room by room basis of every item in your home;
- the more secure your home, the lower the risk of any loss or damage;
- the lower the risk, the lower the insurance premiums are likely to be;
- security measures such as approved locks on doors and windows, together with the installation of intruder alarms may qualify you for significant discounts on the premiums you pay;
- another way of reducing the risk taken by your insurer – and so reducing the cost of the insurance premiums – is to shoulder a greater burden yourself;
- as already mentioned you probably want to avoid the risk of being under-insured by reducing the total amount insured, but you may want to consider taking on a greater excess (the first part of any amount claimed in the event of loss or damage).
Cheaper home insurance
Although the price you pay for your home insurance is likely to reflect a whole host of different factors, you might nevertheless want to think about some of these tips on securing cheaper cover. Further reading can be found at Moneysmart.