Money & Insurance > Guides

Switching home insurance – why you should do it AND what you need to know

Robin Bowman

Robin Bowman
Nov 30, 2016


Here’s a real money-saving tip.

If you’ve been with the same home insurers for a few years and you haven’t checked what else is on the market, you are in for a pleasant surprise.

One that could save you ££££s.

Don’t take our word for it – check for yourself using a comparison site*.

Here’s what you should know.

 

Being loyal will cost you cash!

If you’ve had a renewal letter from your current insurer, then you will almost certainly save money by shopping around.

We’ve never heard of an instance where someone’s circumstances have stayed exactly the same and yet their premium for home insurance has gone DOWN.

But, even if (by some remarkable piece of luck) your premium is lower, the chances are that comparing premiums elsewhere will save you even more money.  

If your company’s rates have fallen, others’ will have done so too.

The sad truth is, being loyal to an insurance company doesn't pay. 

We come across case after case in which people have believed that they were getting the best deal by sticking with the same company, only to discover they had been rooked.

For years, insurance companies have been ramping up premiums year on year – by amounts way over the rate of inflation – in the hope that their customers don’t check last year’s cost and believe the company is offering the best deal.

It’s racket – don’t fall for it!

 

Being Lazy will cost you too!

Laziness is the other thing home insurance companies rely on. 

They hope people just can’t be bothered to check costs by looking at their previous renewal letter (if they still have it) or picking up the phone, hanging on for an hour, just to find out what they paid last year.  

It’s a hassle for sure. 

But, then again, it’s never been easier to shop around by using a comparison tool*. 

If you’re OK with throwing away the £100 or so research shows people can save by a switch, then, fine – don’t check!

 

Start shopping around early

It’s best to check the market well before your renewal is due. The reason is that there will be other factors than price to think about.

Besides, you’ll want to have a proper quote in writing from a company based on your specific circumstances before switching company.

The actual process of switching is simple – but you want to be sure you’re buying the right insurance for YOU.  And you’ll want to ensure your application has been accepted before cancelling your current one.

 

Don’t focus ONLY on price!

It’s all too easy to get fixated on price alone when buying any kind of insurance – but doing so can end up costing you far more than you believe you’re saving.

If you have the wrong kind of cover, with exclusions you didn’t realise were there, you’re in line for a nasty (and costly) shock if you need to claim.

Look at prices, certainly; but then look at exactly what is covered, what are the excesses and so on. Make sure the policy is right for you. 

With insurance, it really does pay to wade through the small print. Because, if you claim, you can be sure that the insurance company will know the details back to front.

So, never assume …

Never just assume that if you have insurance you’ll be covered for everything. Always check.

Often the reason some quotes are so much cheaper than others is that there will be certain exclusions to the policy that will be standard with others, so take care to look out for these.

For example, do you need cover for accidental damage in the home?  Very few policies will include this automatically. If you want it included, expect to pay more.

Similarly, for other higher risk features (higher risk to the insurer), such as contents cover if you take items out of the home and they get damaged, or buildings cover for help with home emergencies, you’re almost certainly going to have to pay more because they won’t be standard – certainly not with cheaper policies.

 

Contents and Buildings – what’s the difference?

This is a question that should have an easy answer, but many people, when they stop to think about it, get confused. 

The walls of your house obviously come under the category of ‘buildings’, but what about the fittings in your kitchen that you’ve installed – are they buildings or contents?

The general rule is that if you turn your property upside down, whatever stays put is 'buildings' and whatever drops out of place is 'contents'. 

But, of course, if in any doubt, you should always ask for clarification.

 

Watch out for the excess

One of the best ways to keep your premium down is not to claim. 

But, of course, insurance is all about cover for financial loss. So, you need to strike a balance between how much you’d be prepared to stump up before you decided, enough is enough, this is what I have insurance for.

This is where the excess comes in.  

All policies will stipulate a sum below which a claim will not be paid out on. 

One way they can bring premiums down is to raise this excess, which is fine. Just make sure you are happy with the level it’s set at. 

That way you’ll avoid an unpleasant surprise if the worst happens and you need to claim.

* The insurance quote systems are owned and operated by Seopa Ltd who are authorised and regulated by the Financial Conduct Authority (FCA). A Spokesman Said Limited is an introducer appointed representative of Seopa Limited (FRN: 313860).