With many household bills soaring, home insurance may be one area where people are tempted to try to cut back.
Hannah Davidson, a senior underwriting manager at Aviva, says that while it’s understandable people are focusing on their finances, the question anyone should really ask themselves about their home cover is: “Can I afford to be without it?” After all, it’s there for some important reasons.
“We’d encourage people to consider, if the worst was to happen, could they find the money to replace the possessions in their home?” says Davidson. “Or even more importantly, could they meet the expense of rebuilding their home?
“We’d all like to think that events like floods, fires and burglaries won’t happen to us. But the sad reality is that they can and do happen.”
Homeowners with mortgages should also bear in mind requirements that borrowers should have buildings insurance cover for the duration of the mortgage. Whether the borrower decides to have contents insurance is generally left up to them.
“There are ways to help keep the cost of home insurance down. Many insurers also offer different levels of cover, so customers should choose the one which best fits their needs,” says Davidson. “But they should also be aware of any maximum limits payable on their policy to make sure they are high enough to cover their possessions and, crucially, home re-build costs.
“To help with this tricky calculation, the Association of British Insurers provides a calculator for home rebuild costs on its website (abi.bcis.co.uk) that you can use as a guide.”
While shopping around and comparing deals, here are Aviva’s tips for keeping home insurance costs down…
1. Consider a combined policy
If you’re a homeowner, you may save if you buy combined contents and buildings cover, rather than two separate policies.
Renting? Remember you’re likely to need just contents insurance to protect your possessions inside the property.
2. Look into multi-product discounts
Some insurers offer discounts if you have more than one product, such as home, motor, travel and even health insurance.
3. Check if your home is in a flood risk area
If it is, ask if your insurer is part of the Flood Re scheme, which helps to improve the affordability of flood insurance for those living in high-risk areas. Some insurers are not part of the scheme and premiums may be higher for people living in high-risk areas, or they may exclude flood cover, so it’s important to check.
4. Would a higher excess be suitable?
Many home insurance policies have a standard excess – the amount you would contribute towards a claim if you made one. But choosing a higher excess may lower your premium. But do consider how you would pay the excess if you did need to claim.
5. Don’t double up
You may be asked if you want to take out additional insurance when buying new items, such as a sofa, carpet or phone, for example.
Make sure you’re not already covered under home insurance, particularly if you have accidental damage cover. If you don’t accidental damage cover, you may find it’s cheaper to add it to your home policy than pay for separate policies, but always check the terms.
6. Think about add-ons
Your home insurance premiums will usually increase if you add on optional covers such as ‘accidental damage’ and ‘personal belongings’, which can cover items away from the home. But, if you’re thinking of removing them, make sure you could afford to pay for a new item if you did lose or damage something.
7. Do research to avoid shocks or disappointments
Home contents policies will generally have a ‘single item limit’ for valuables – the maximum payable for any one item in the event of a claim. Items above this limit – usually around £1,000 to £2,000 – should be listed separately, to ensure you’re adequately covered.
Precious metal prices have soared over the years, so if you’ve had jewellery for a while, it may be worth getting a new valuation in case it’s worth more than your single item limit. The same is true of some high-end watches.
While trying to keep costs down, Aviva says it’s also important to avoid underinsurance – where the total amount an insurer would pay out is less than the value of what you own. The replacement costs of carpets and curtains, outbuildings, fences and patios, for example, can sometimes be overlooked.
Many insurers have an upper contents limit for items stored in outbuildings, so consider what you keep away from the main home and ensure you have good security to deter opportunist thieves.
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