Home Insurance Money Saving Tips

As the gloom of the recession continues to emanate over the UK, consumers are doing all they can to cutback on their expenses wherever possible – and unfortunately it seems that home insurance has crept towards the top of the list.

According to the survey, 3.9million households do not have home contents insurance and nearly half of those that don’t admit they can’t afford it in the current global economic crisis. Even more worryingly the survey revealed that around 16 per cent have not even thought about taking out home insurance while 18 per cent think that the risk doesn’t warrant the expense even though there has been a four per cent rise in domestic burglaries since the recession began.

Is home insurance something you can go without?

The buildings insurance aspect of home insurance has become an essential for most homeowners because the majority of mortgage lenders will not give out loans unless you have it in place. This means that most homeowners do at least have protection in case their house was to burn down or be seriously damaged in a storm.

However, the contents aspect of home insurance is not essential. Nevertheless, if anything, you are far more likely to need to make a claim on contents insurance due to the increased risks. Quickly tally up the cost of your possessions – from TVs and computers to carpets and curtains - and then imagine the expense of attempting to replace them if a fire or severe storm hit your home. There is also the added risk of home burglaries to contend with.

So while it might seem worthwhile to skip contents insurance to save a few pounds each month, the reality is that going without it could prove far more expensive in the long run.

The survey also revealed that renters are the most vulnerable, with two million tenants admitting that they do not have home contents protection and 11 per cent even believing that their contents are covered by their landlords’ insurance. This is not the case. Landlords insurance will cover the building and, if your landlord is thorough, his or her own select contents in the home – such as carpets and furniture if the property is pre-furnished. However, everything that you own is your responsibility to replace if the worst happened.

So how can you save money on home insurance?

While home insurance is important it’s clear that most property owners are skipping the contents aspect due to financial issues. However, there are ways to reduce premiums – here are some money saving tips.

Firstly, make sure you’re on the cheapest policy. Many homeowners fall into the trap of accepting renewal quotes every year because the policy was cheap when they initially took it out. The reality however, is that providers increase premiums year on year while offering their cheapest deals to new customers. So just because your deal was cheap 12 months ago, it doesn’t mean it will be competitive again now. Instead homeowners should shop around with a comparison website to compare quotes from providers and ensure they’re getting value for money.

From there it’s all about reducing your risk level to the insurer – the less likely you are to make a claim, the lower your premiums will be. This is why home insurance providers offer no-claims discounts to encourage homeowners not to make claims for comparatively minor issues. Building up a no-claims discount could slash around 60 per cent off a premium.

However, you don’t have to wait years to earn cheap home insurance. In fact you can cut your risk in the eyes of an insurer even before you take a policy out particularly if you focus on the security of your property. With burglaries on the rise, providers are keen to see homeowners implement security measures. This can be done by fitting burglar alarms, time-switch lights, security cameras and more. If you feel you can’t afford to invest in this protection then why not set up a Neighborhood Watch Scheme with the people that live on your street? Many insurers offer discounts in the region of 10 per cent if you do so. Make sure you tell your homeowner if you have double glazing and a big dog in your house too as they can put off thieves.

Look at other risks too – for example, if you live in a flood risk area invest in flood protection devices. Try and reduce the risk of fire getting out of hand with smoke detectors and fire extinguishers installed in your home. Even quitting smoking can help you save.

Another tip for cheap home insurance is to increase your voluntary excess – this is the amount you pay in the event of a claim. However, don’t set the bar too high as you will have to pay this amount if a claim is necessary.