How to Reduce the Cost of Home Insurance
Every one that own a home will probably have home insurance. If you have a mortgage then the lender will require that you have it and if you own it outright then you will probably want it. The home insurance will cover you for rebuilding the house if it falls down due to subsidence or floods, if it is damaged in fire or it has any other type of damage to some or all of it. What you are covered for specifically will depend on the type of cover you have. However, whatever you have, it will cost money. You may feel that it is quite expensive and wish that you could pay less. There may be a way that you can!
It can be a good idea to compare the prices of different providers to see whether you are paying more than necessary. If you use a comparison website you will be able to get an idea as to whether you are paying more than necessary or not. You will probably find that there are insurers that will be cheaper. It is an idea to not switch immediately though. This is because you will find that there are lots of different comparison websites and they will list different insurers so you may be able to find an even cheaper one. There are also companies that only deal directly with customers and will not go through these websites anyway. These tend to have the word ‘direct’ in their company name so you may want to get a quote from them as well. Alternatively, you may want to go through a broker who will search through different insurers, but again they may not look at all of them. It is worth being aware that comparison websites and brokers get paid commission by the insurers that they recommend. This means that they may be likely to recommend insurers that they get paid well from and this means that you might not get the best possible price using them. However, it is much more convenient than getting lots of quotes from different insurers so you may decide that it is worth it anyway. Do make sure that the cover you get with the cheaper insurer is equivalent to what you have already as it could be cheaper because it does not provide you with so much cover.
It can be well worth negotiating. This is particularly worth it if you want to stick with your current insurer but have found cheaper prices elsewhere. Talk to them about the fact that they are more expensive and see what they say about it. They might be happy to reduce their premiums to keep you as a customer. Some will do this without any quibble at all as they have a budget available to do it to try to hold on to customers. It does seem unfair, but customers who ask for a discount will very often get one but those that do not will just not have one and have no idea that they are paying more than necessary. So, make sure that you contact the insurer and get any discount that you are entitled to. It is not a very British thing to do but we need to do it if we want the chance of paying less for our insurance.
On insurance policies we will always pay an excess when we make a claim. This is an amount of money that we have to put towards the claim. This stops people making really small claims which are not cost effective for the insurer. So often this will be £100 so if you claim for something worth £250, you will only get £150 paid and you will be expected to pay the £100 towards whatever it is. If you raise this excess amount, then it is likely that your premium will reduce. This is because the chances of you making a claim will go down as you will not be able to make claims for lower value items. You will need to think about what you will be able to afford to pay and also whether you would bother to make claims for smaller value things.
Do not Claim
If you do make a claim, then you will find that you premiums will start to go up. This is because the insurer will see you as more of a risk and therefore charge you more as a result. This is something that you will need to think about, particularly when you are making smaller claims. Consider whether you can afford to pay for it without having to make a claim so that you can save money in the future.