Property Cover

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Should I Shop Around for Home Insurance?

Research conducted by Sainsbury’s in October 2007 highlighted a general apathy when it came to shopping around for home insurance. Apparently a quarter of the British population (about 8.5 million people) do not look around for different quotes when buying home buildings or content insurance – many simply go with their mortgage lender. As NatWest says ‘Mortgage providers normally require home buildings insurance to be arranged as a condition of the mortgage, but you don't have to buy your home buildings insurance from the same company who provided your mortgage’. Taking a look at the mortgages on offer from this company will highlight what this means.

Getting the best deal

• Get a discount - insurance companies may well offer discounts if you buy your buildings and contents policies together from them (or another product, such as car insurance). You may get an introductory discount as a new customer or an on-line discount (for example, both ASDA and Marks & Spencer are currently offering a 10% discount on home insurance if you apply on-line). You also need to tell the insurer the number of years that you have not made a claim, as this will reduce your premium. Paying the full amount upfront can sometimes be cheaper than paying monthly – but this differs between insurance companies.

• Be accurate – in order to ensure you get the correct insurance and the best deal, make sure you give the full facts when applying for insurance - if you do not, your policy may not be valid if you make a claim. You should also check the offer is right for you and ask questions if you are unsure, particulally about the small print. Think about the value of your belongings – add up the value of all items in each room to calculate the overall value of your possessions. Your contents cover will be based on their value and although there will be a minimum recommended figure, based on your details, you may wish to increase it. Make a list of high value and high-risk items over £1000, such as jewellery or electrical equipment, and ask if specific cover is required for these.

• Take precautions – you can reduce your payments by asking the insurance company for a list of suggestions on how to reduce your premiums and then by taking action on their advice. Extra precautions will relate to increasing the security of your home and thereby reducing the chance of you making a claim. You could, for example, fit locks to windows, the shed and garage, and install outside lighting or an alarm. The police are a very useful source of advice on security issues and may offer a free service that allows you to mark your valuables discretely with your postcode. In addition, many insurance companies consider being part of a Neighbourhood Watch Scheme a benefit. Finally, don't make it obvious when you're out or away on holiday. When seeking quotes, it is important to inform the insurance company all of these improvements and security measures to get the best deals.

• Shop around – you should do your homework with insurance. Some people like to ask a trusted friend to recommend a good company, others prefer to go online and use a reputable site that will compare products, such as Comparethemarket.com - which can compare dozens of insurers and complex policies for you for nothing and suggest ones that best suit your needs, consequently saving you time and money.