According to the AA Insurance Premium Index, the cost of home insurance has been rising steadily. Typically, the annual cost for buildings cover is around £209, but over the past year, the average cost of such a policy has risen by nearly 13%, and is showing little sign of slowing down.
Home cover is a necessity if you want to protect your property (probably your most valuable asset). Although it’s easy to stick with the same provider year after year – it could make financial sense to shop around for a better deal. Be selective about your policy and your provider to make sure you’re getting the right amount of cover for the best price.
A little know–how can make all the difference when selecting a policy.
How to reduce your premiums
The right level of cover
Make sure you give an accurate ‘sum assured’. Don’t underestimate the value of your home and its contents and leave yourself vulnerable in the event of a claim. Equally, don’t overestimate the value and end up paying more for cover you don’t actually need.
The correct rebuild cost
Following on from the above point, the amount of buildings insurance you need is based on the rebuild cost of your property. Don’t get confused – this is NOT the market value. The rebuild cost is how much it would cost to rebuild your property from scratch. Typically, the rebuild cost is less than the amount your house would sell for.
Change your excess
By agreeing to pay a higher excess, you could reduce your premiums. The excess is the amount you agree to pay out of your own pocket in the event of a claim. Although agreeing to a bigger excess could get you cheaper cover – make sure you’d be able to pay this amount if you ever did need to claim.
Step up security
By taking prudent security measures around your home, you might find your insurer rewards you with a lower premium. Multi-point locking systems on windows and doors, burglar alarms and neighbourhood watch schemes are good ways to help lower the risk of a break-in. If your insurer sees you as a lower insurance risk, they may lower the cost of your cover as a result.
Combine your cover
Buying a combined policy that covers both a building’s structure and its contents with the same provider could see you make savings.
Shop around. Search for policies online and compare different quotes. Always make sure you compare prices on a like-for-like basis, looking at the policy features as well as the price. The cheapest policy might not give you the same level of cover as a more expensive one.
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