Home Insurance is Vital During Global Downturn

Home insurance is vital during global downturn

With the credit crunch in full flight, most consumers have been concentrating on protecting their savings - spreading their money around among financial institutions to maximize their protection. However, new research suggests that savings are not the only thing you should be protecting.

According to Abbey Home Insurance, consumers should be concentrating on protecting their homes as domestic burglaries typically rise sharply during declining economic conditions. It found that during the last recession, which stretched from May 1990-March 1992, the number of domestic burglaries reported by the police in England and Wales rose by an astonishing 38.8 per cent.

These statistics have been backed up by Home Secretary Jacqui Smith who has voiced concerns about a ‘significant upward pressure on acquisitive crime during a downturn’.

With household budgets tight, many families are looking to cut back on expenditure wherever they can. However, this stark warning merely emphasis that home insurance is not an area that should be short-changed.

Why home insurance is so crucial

If the worst occurs, home insurance can be a saving grace as contents insurance will protect the items in your home against theft. Most policies now offer new-for-old cover meaning you will get a brand new replacement for anything that is stolen.

However, for a home insurance claim to be successful, homeowners must keep their policies up-to-date. During December in particular, the value of contents kept in a home will increase greatly as property owners prepare for Christmas and buy gifts for the family and attempt to make the house look as good as possible in anticipation of visitors.

Keeping track of new items brought into the home during December can be difficult, but thankfully many home insurance providers will automatically increase your level of cover over the festive period - sometimes by 10-15 per cent. Indeed many home insurers offer unlimited contents insurance all year around, so you are always protected. The key is to check your policy now and ensure sufficient cover is in place.

How you can avoid making a home insurance claim

While it’s vital to ensure that home insurance is in place and that you are fully protected if the worst happens, it’s clear that prevention is better than cure. Not only will protecting yourself against a theft or burglary help to lessen the chance of the stressful event occurring but it also lessens the chance of a home insurance claim being necessary, which could wipe out your no-claims discount.

To make your home less appealing to thieves, ensure that valuables are kept out of sight - over Christmas this may mean storing presents in cupboards rather than under the tree. Close your curtains early in the evening to keep out prying eyes and when Christmas is over don’t leave empty boxes in sight outside your home as this will tell a thief what goodies you have inside.

Take measures to protect your home by fitting a good, insurer-approved house alarm - many insurers will reward homeowners with discounts in the region of 10 per cent for installing a system. Also look into other security measures as potentially good investments - for example you could install security lighting and security cameras. There are also discounts available for joining a Neighbourhood Watch scheme.

Most thieves are opportunist and will therefore look to act when the home is empty so you should lock up securely and ensure any security devices you have are switched on. If you’re going away for a holiday or any sustained period, ask a neighbor or friend to collect your post and ensure you cancel milk and newspaper deliveries. Don’t make it obvious that the house has been left unattended so consider asking someone you trust to enter the property on your behalf and open and close curtains each day to give the impression someone is home. Even if you just go out for the night, think about leaving a light on and a radio running.

Even if you take all of these preventative measures however, there is no guarantee that a thief won’t strike. As such pay close attention to your home insurance. If you feel that paying for unlimited contents cover would be too expensive then remember to adjust your policy as new items are brought into the home.

Expensive items in particular need close attention, even with unlimited contents cover. Most home insurance policies have a single item limit - usually in the region of £1,500. Anything that is worth more than this may need to be covered separately.