“I got my home insurance bill in the post last week and the quote was 20pc higher than last year. When I got in touch with my insurer to query the increase, I was advised that in order to safeguard against me being underinsured, it had adjusted the buildings sum insured on my policy in line with the latest SCSI House Rebuilding Guide – and that this accounted for much of the rise in premium. I don’t want to risk underinsurance so am happy to leave the buildings sum insured as it is but is there anything I can do to bring down my house insurance premium?”
Commentary from Paul Walsh, MD of Peopl Insurance
You are correct not to risk underinsurance as you risk only getting a fraction of the payout you were expecting from an insurer – and having to foot the rest of the bill for repairs or other losses – if you have underinsured your home or its contents.
There are still of plenty of things that you can do to reduce your home insurance premium though.
First, shop around. Do not auto-renew. You could secure similar or even better cover with another insurer for a fraction of the price you’ve just been quoted.
Second, if you have a mortgage, don’t feel under pressure to take out home insurance with your lender. While it is likely a condition of your mortgage that you take out adequate home insurance, it is not a condition that you take this cover out with your lender. You have the freedom to shop around for this cover and doing so will likely save you money. Home insurance isn’t a “core product” for a bank so they are often more expensive than dedicated home insurance providers.
Third, pay your home insurance premium annually in full and upfront. If you pay in instalments over the year, you’ll often be hit with a surcharge for that.
Fourth, find out what discounts you’re eligible for and take them up. You may be entitled to a loyalty discount if you have an additional insurance policy (such as motor or travel) with your home insurer. Make sure you’re getting the full credit for any claims-free history you have as most home insurers offer a no-claims discount if you haven’t had a house insurance claim for a set number of years. You may qualify for a credit union discount if you’re a member of a credit union or for an alarm discount if you have a house alarm.
A word of caution though: if claiming an alarm discount, be sure to turn on your alarm anytime you leave the house. Otherwise, your home insurer could refuse to cover you. It would be worth asking your insurer when exactly it expects you to have your alarm turned on – and how often it expects you to have your alarm checked and serviced. Otherwise, your insurer could refuse to pay out if you go to make a claim after you’ve been broken into. Be careful too if you have installed your own house alarm yourself – it’s very likely that your insurer won’t cover you for a break in if it finds out that you bought and installed your own house alarm.
You may also get a discount if you buy your policy online. When buying online though, be careful to read all of the insurer’s assumptions, as well as the terms and conditions of the policy. Only accept these assumptions and terms and conditions if they are relevant to you and your property and you’re comfortable with them. With home insurance, the assumptions can cover anything from the age and condition of the property being insured, to the materials used to build the property, to whether or not the property is your own home or is rented out to tenants, to whether you’ve ever been declared bankrupt or convicted of an offence of any nature. An insurer is very likely to turn down your claim if you tick a box to indicate that all of the assumptions which the policy is based on apply to you and the property being insured – if it later transpires that this is not the case.
Another option open to you is to increase the excess (the first part of a claim which you pay yourself) on your policy – but only if the savings are worth it and you’re comfortable with the higher excess. If the excess on your policy is too high, it may not be worth your while making a claim.