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How to save money on your home insurance

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Have you ever heard of your home insurance premiums “price walking”?

If not, you are probably not alone, since it typically happens in an especially stealthy, almost unnoticed way. It’s what happens when the insurer with whom you have been arranging your building and contents insurance increases the premiums – by a relatively small amount – at each annual renewal.

Citing an interview with the Money Saving Expert’s Martin Lewis, on the 19th of November 2018, the Daily Star explained how the increase may start with a modest increase on the first such renewal, but climb to as much as 50% or more by the time you make the fifth renewal.

The “loyalty penalty”

The practice has gained the appropriate title of a loyalty penalty – since those most affected are the homeowners who faithfully renew their existing home insurance policy with the same insurer year after year.

Here at UKinsuranceNET, on the 13th of September 2018, we also wrote about the unfortunate consequences of such misplaced loyalty towards certain providers of home insurance.

In the same article, we explained how the building and contents insurance policies we arranged were consistently competitive throughout the years between 2012 to 2018. 

Even allowing for increases to the total sums insured – to reflect increasing property values and reconstruction costs – the premiums for an average-priced home in Middlesex, for example, rose by a modest £46 a year. An identical increase was recorded for a further example of insurance on the average home in Sussex.

Other money-saving tips

Have your loyalty respected and save money by arranging your home insurance with us here at UKinsuranceNET, whilst also giving thought to other ways of cutting the cost of your premiums:

Combine your building and contents insurance

  • you may buy building insurance quite independently of any contents insurance for your home; 
  • you are likely to make a substantial saving, however, by arranging combined building and contents insurance in a single package, from the same insurer – confident in the knowledge that you have overlooked neither one nor the other when it comes to renewal;

Total sum insured 

  • although you want your total building sum insured to cover the worst case scenario in which your home needs to be completely rebuilt, avoid exaggerating that estimate and overinsuring the property – you end up paying more in premiums than you need; 
  • on the other hand, avoid underestimating the total value of every item of your contents – underinsurance may leave you insufficient funds to repair or replace lost or damaged items; 

Buy annually

  • it might seem more convenient and immediately kinder on your wallet, but paying for your home insurance through monthly instalments may incur a credit charge;
  • you can typically save that cost completely if you pay your annual insurance premium upfront by way of a single payment; 

Excesses 

  • just like most other forms of general insurance, home insurance typically incorporates an excess into each claim you make – and the amount of excess may vary from one type of claim to another; 
  • you might want to consider increasing the amounts of excess in return for a reduction in the price of the premiums you pay – but remember that any claim is then going to cost you more in terms of your personal contribution.

Competitively priced home insurance is likely to be a priority – and fortunately there are ways you may make the cost of its premiums cheaper still.