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A guide to home insurance
It’s safe to say that in the past few
years, the UK has experienced some pretty extreme weather, be it the big freeze
of early 2010, devastating floods or high winds.
What’s happening to the weather also has
the potential to have implications to our home insurance, too.
Findings from the Association of British
Insurers showed that the weather will have a greater affect on us that ever
before in the next 50 years. Storms are set to cause 66% more damage than they
do already - causing around £14 billion of damage worldwide. Meanwhile, floods
are set to cause £75 billion of damage in Europe over the next few years and a
staggering 1500% more damage to the UK than at present.
With a higher risk of disaster comes greater
home insurance premiums for all of us. And some of us are already in a position
where insurance is either expensive or hard to obtain.
Where your home is located is likely to have
significant impact on what you pay for your home
insurance premium. If you live in a flood risk area then chances are
you will have to pay a much higher premium due to the increased chance of the
company paying out.
What insurance is on offer?
Roughly speaking, home insurance is split
into two types: buildings insurance and contents insurance.
Buildings insurance covers your home, it’s
foundations and permanent fixtures and fittings. It is essential for home owners
to protect against damage by the environment. Meanwhile, contents insurance will
cover the belongings in the house. You need to assess the value of these
yourself, preferably on a room-by-room basis. It’s essential that you’re as
accurate as possible, as failure to do so may mean you’re caught short if you
need to make a claim. Contents insurance is also advisable for those who rent
their homes. Some insurers may offer it at no additional cost to those who take
out buildings insurance policies.
It’s vital that you know what
circumstances will invalidate your insurance, and the exclusions which your
insurer makes. Failure to do so may leave you with a nasty shock should you need
to make a claim.
How to make your insurance cheaper
There are several ways to make your
insurance premium cheaper. Some may require investment, but the outlay will pay
dividends over the years, not to mention make your home safer. For example, you
could:
Improve security
Some insurers will
offer a discount if certain types of locks are used on external doors. A burglar
alarm is also a plus, providing you have it professionally fitted and
maintained.
Get involved in
Neighbourhood Watch
If you’re a
member of a neighbourhood watch scheme, you could be rewarded with a discount by
your insurer.
Prevent fire
By fitting at least
one smoke alarm you’re likely to make yourself eligible for a discount, but
make sure it’s working or risk invalidating a claim.
Agree to a
higher excess
Opting to pay a
higher voluntary excess will make your premium cheaper. But it should always be
set at a level that you can comfortable
Buy together and
save
If you’re a
homeowner, buying buildings and contents insurers together may yield a discount.
Some companies may even throw in the latter free.
Choose your
options
The more
‘add-ons’ that you opt for, the more your insurance policy will cost.
Therefore, to make your policy cheaper, don’t opt for things that you might
not need.
Shop around
Comparison
websites have made it much easier to browse lots of quotes from a wide range of
insurance providers but make sure the policy that you’re buying provides
adequate cover should you need to call upon it: the cheapest is by no means
always the best.
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