When an insurer is figuring out if they can cover you and what premium to pay, they’ll consider a few factors. Some things she can’t do much about, including the crime levels on her street, any previous homeowners insurance claims, or when her property was built.
Other broader considerations can affect what insurers charge everyone, including government schemes like flood fires, which help keep premiums low for people in flood risk areas, the current rate of claims, increases in the tax on insurance premiums and the changing cost of labor and repairs over time.
Reading: How to get cheaper home insurance
but some things are in your hands. Here are some steps you can take to help lower what you pay for buildings and contents insurance.
have good security settings
You’re 10 times more likely to be robbed if you don’t take basic security measures for your property, like having strong locks and an intruder alarm, according to a report from the Head Office and the Association of British Insurers. Good security can make it harder for thieves, help you meet your insurer’s requirements, and potentially lower your premiums.
These are some of the main ways to increase your level of security:
Your insurer may offer a discount if you have a burglar alarm, and other deterrents, such as security cameras, can help reduce the attractiveness of your property to an intruder. While you can opt for the latest smart security system or monitored alarms with automatic alerts, a burglar alarm doesn’t have to be expensive to be viewed favorably by insurers or act as a deterrent.
Be sure to leave your alarm on every time you leave home, and check to see if your insurer expects it to go off when you sleep at night as well. make the alarm bell box visible, to help deter would-be thieves.
Depending on your zip code, having a burglar alarm may be a condition of your coverage, so always check. Your insurer may also ask if the alarm system has been installed or certified by the National Security Inspectorate (NSI) or the Security Alarms and Systems Inspection Board (SSAIB).
in more than a third (39%) of home fires in england, battery-powered smoke alarms did not work, according to head office data from april 2020 to march 2021. reasons included missing batteries or Faulty or, most commonly in England, Wales and Scotland, smoke alarms are not placed close enough to the fire.
If you tell your insurer you have smoke alarms, but they don’t go off during a fire, you risk your safety and may invalidate your claim.
Place at least one on every level of your home and, ideally, in every bedroom. test them often, so you know the smoke sensor and power supply are working.
From February 2022, homeowners in Scotland will be required to install interconnected smoke detectors on their ceilings, including a heat alarm in the kitchen. a heat alarm warns of a rise in temperature, but it won’t be triggered by cooking fumes alone.
With an interconnected system, if one alarm sounds, the others will too. You can find more guidance on this on the Scottish Government website.
high quality window and door locks
Your insurer will ask about the type of locks you have on exterior doors, including patio doors and windows. Heavy-duty five-lever mortise latches that meet British Standard BS3621 and key-operated multi-point locking systems are the gold standard, but your insurer will provide you with a list and, in most cases, pictures of the types of padlocks, if you are not sure . internal locks on windows and skylights must be key operated, with anti-lift devices on sliding patio doors.
always double lock doors and remove the key, keeping it out of sight, in a safe place. and don’t leave your keys under a flowerpot or doormat, as that’s the first place a would-be thief would look, and it may invalidate your claim.
don’t assume auto-renew offers the most competitive price
New rules went into effect in January 2022 to end the loyalty penalty for existing auto and home insurance customers. This means that your home insurance provider cannot charge more than new customers for the same coverage when you renew your policy.
The Financial Conduct Authority (FCA) claims this will save consumers £4.2bn over the next 10 years. so it seems like good news if you paid above the odds by not trading in the past.
Still, letting your policy auto-renew doesn’t necessarily mean you’ll get the most competitive price on the market. for example, your premium could still go up if you made a claim or need to change your policy. and other factors, such as when and how you buy a policy, and how individual insurers decide how likely you are to file a claim, will affect the premium you’re charged. You may also want to change insurers for other reasons, like getting better customer service.
so if price is important to you, you may want to shop around for a better deal before your policy automatically renews each year.
Comparison sites like nerdwallet are a quick way to compare the coverage you need from different insurers, or you can contact an insurer directly. You can also use a broker or, if it’s a renewal, you can ask your insurer to review your premium. If you have a mortgage, you do not have to purchase home insurance through your provider, unless stated in the terms and conditions.
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do not overinsure
Overinsurance means paying too much for coverage you really need. One way to do this may be to add extras like accidental damage coverage without considering whether the standard coverage is enough.
Some insurers include limited coverage for accidental breakage of built-ins, such as sinks or windows. If you’re accident-prone or have children, this additional coverage may be right for you, but always check your policy documents first to see what’s covered and what’s excluded.
While you don’t want to risk being underinsured, don’t overestimate the amount of buildings insurance and contents coverage you need. the cost of rebuilding your property is not its current market value; it is the cost of rebuilding your property from scratch, which is usually a smaller amount. You can use the Association of British Insurers’ Reconstruction Cost Calculator or hire a Chartered Surveyor to figure this out for you. If you just bought your home, you should be able to find the cost of rebuilding in your mortgage appraisal or deed.
With contents insurance, if you overestimate the value of your belongings, your premium may be higher than necessary. so take the time to walk through the rooms and check out the lofts and garages, doing the sums as you go. you’ll want as accurate a figure as possible for the total replacement cost, so that the total amount of coverage is not more or less than it needs to be.
no double insurance
If you have double insurance for the same thing, for example, if a contents insurance policy automatically renews and you take out another contents insurance policy on the same property without canceling the other, in addition to paying two premiums unnecessarily, it can cause problems when making a claim.
Making a claim on both would be considered fraud, but even if you file a claim on one policy, the two insurers may decide to split the cost of your claim between them, which will likely cause additional delay and administration, and may increase your premiums . however, this is only when two policies cover the same insurance. therefore, having buildings and contents insurance with different providers is fine as they cover different things.
Some bundled checking accounts include home emergency coverage as a benefit. so check if you already have it with your bank, and the level of coverage it offers, before adding it to your home insurance.
consider your excess
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Generally, the higher your voluntary excess (the amount of each insurance claim you agree to pay), the lower your premium will be. Your insurer sets the mandatory excess, and the voluntary excess is what you agree to pay on top of that. therefore, with a total deductible of £200, a claim of £1,000 for a damaged sofa would reduce the payment to £800.
If you decide to increase the voluntary excess amount, make sure you can afford the reduced payment. you may have to pay a fixed amount for certain types of damage; for example, a mandatory excess of £1,000 for sinking and £450 for leaking water is not unusual.
With a combined buildings and contents insurance policy, check to see if a claim on both parts of the policy after a fire, for example, would mean two overpayments or just one.
create your discount without complaints
If you don’t file a claim on your home insurance for a year or more, you may be offered a no claims discount (NCD). the longer you go without a claim, the greater the savings. It’s also usually possible to take your ncd with you if you change insurers. however, it must be continuous coverage without interruptions.
Wanting to keep your ncd shouldn’t discourage you from making a valid claim, especially for major damage or loss. after all, that’s why you bought home insurance in the first place.
But you may want to weigh whether it’s worth replacing something relatively inexpensive that’s damaged without making a claim, to avoid losing your ncd and increasing your premiums. That said, making a claim on some add-ons, such as home emergency coverage, may not affect your ncd, but this will depend on the insurer, so always check.
If you have separate buildings and contents insurance, a claim on one policy will generally not affect your NCD for the other policy.
annual payment, not monthly
Many insurers offer the option of paying home insurance premiums up front or splitting them into monthly payments, including a down payment. Although this is not affordable for everyone, paying the premium all at once could save you money. Insurers often charge an Annual Percentage Rate (APR) on monthly payments, which will end up costing you more.
When you compare home insurance quotes, you’ll see the difference in total cost between annual and monthly payments, so you can determine what’s manageable for you.
combine your cover
If you need buildings and contents insurance, you don’t have to get both from the same insurer, but it might be cheaper if you do. It can also make life a little easier if you need to file a claim after damage to your home and contents.
The average combined buildings and contents premium, according to the Association of British Insurers, is £314, with a separate buildings policy averaging £250 and contents costing an average of £128 per household.
Also look for loyalty discounts. If you already have a policy with an insurer, they can offer you a multi-product discount if you take out another policy with them. Bundles are also available for auto and home insurance, where they’re two separate policies, but you get a discount when you buy them together.
Don’t always assume the cheapest home insurance is the best for you. it must offer the right level of coverage for your property and belongings, and you may want to consider other factors, such as what customers say about handling their claims and customer service.
source: getty images