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Home Insurance

The Best Ways To Save Money On Your Home Insurance
 
Home insurance is an essential for homeowners, but the monthly premiums can really impact on your finances. In the last few years, the cost of living has risen faster than the average salary, leaving many people questioning how they can save money and stretch their income a little further. Fortunately, insurance policies are generally an area where most homeowners can save themselves a considerable amount of money.
 
Although a lot of people are aware that shopping around for a new insurance policy could save them money, few people actually do it. Often this is because they think it will take a lot of time and so they procrastinate on looking, or they think that if they do find a better policy the process of switching will be more hassle than it is worth. However, many homeowners who have actually gone through the process report that it was much easier than they thought it would be, and they regret not having done it sooner. For very little effort, you could save up to several hundred pounds per year.
 
In this article, we will cover some of the simplest ways to cut your home insurance premiums. Although it is a great idea to approach new insurers for a quote, it is always worth renegotiating your terms with your existing provider too.
 
Increase The Deductible On Your Home Insurance
 
You can reduce your monthly premiums by up to a quarter if you are willing to raise your deductible. However, you need to consider the risks involved first.
 
The deductible is the amount which the homeowner is liable to pay in the event of making a claim. This means that if your policy has a deductible of £250, you will need to pay this amount and the insurance company will assume responsibility for the rest of the costs. If the claim is worth less than £250, the homeowner is entirely responsible for the bill and there is little point making a claim.
 
If you do not believe that you are likely to make many claims and you have a financial safety net (such as savings), it can be worth taking a risk and negotiating a policy with a high deductible. In return for the shared risk, the insurance company will reward you with low monthly premiums. This can save you thousands of pounds over the years, as long as you rarely need to make a claim on your policy.
 
If, however, you have made many claims on a policy in the past, this is not always a good financial strategy. You should look at other ways of cutting your premium.
 
Combine Different Policies
 
Generally speaking, insurance providers are keen to reward customer loyalty. One of the ways to capitalise on this is by taking out a combined policy with one of your existing insurers. In most cases, this would mean taking out a combined home and auto insurance policy.
 
The incentives offered by companies for doing this will vary, but you can save up to fifteen percent with this type of policy. In many instances, you will noticeably reduce your monthly premiums with a combined homeowner insurance policy. However, you should still take the time to make price comparisons with competing insurance companies, as sometimes you will find that taking out the policies separately with two different insurers will still work out cheaper.
 
Consider What Risk Your Home Represents
 
Insurance premiums are not guesswork. They are set by the company based on a risk assessment of your home, and the likelihood that you will need to make a claim. Therefore, being aware of how an insurance company views your home will allow you to make changes that could lead to lower payouts each month.
 
One of the risks that can considerably push up your premiums is the likelihood of a natural disaster occurring, for example purchasing a home in an area at risk of flooding will make your homeowner insurance very expensive. However, investing in measures which will protect your home in the event of such of a disaster will be viewed favourably by the insurer, and the lower perceived risk can be used to renegotiate your premiums.
 
If your property is an area where there is very little chance of a natural disaster, you can cut your premiums by refusing policy extras you are unlikely to utilise. For instance, there is little point extending your policy to include earthquake coverage if there is no history of earthquakes in either your town or the surrounding area.
 
Be aware of other unnecessary policy extras too. For example, insurers view homeowners with a lot of valuable artwork or jewellery as a higher risk, since a burglary can result in considerable payouts for them. If you have no artwork and only wear costume jewellery, you can reduce your coverage, thereby also cutting your premiums.
 
Ask What Discounts Are Available
 
Once you have honestly assessed your property and taken steps to reduce any obvious risks, ask your insurer for further advice. Many companies offer small discounts for simple security measures, and these are often things which are very cheap to implement. Examples of features which often lead to a discount include security alarms, deadbolts and having fire extinguishers in the home.
 
Sometimes, there may also be applicable circumstances which entitle you to a discount on your policy. Most insurers will offer a discount of around ten percent if you are retired or are over a certain age. This discount is not always applied automatically, so it is always a point worth raising if you are over the age of fifty-five.
 
Keep Your Credit Score Healthy
 
The final tip is to always be mindful of your credit score, as the insurer will take this into account when calculating your premium. People who pay their bills on time and do not have a lot of open credit accounts are seen as low risk by companies, and will be rewarded with lower monthly premiums as a result.
 
Home insurance premiums can add up considerably over the years. Ensure that you are not paying over the odds by adhering to the above tips when renewing your policy.

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