Insuring your home, and its contents, is important. Your TV and bed might not be as important to you as your partner or children. But that doesn’t mean that the damage or theft of something in your home wouldn’t affect your life. Without home insurance, a disaster like a burst pipe or an electrical fire could cause damage that you can’t afford to repair. Some mortgage providers will even require you to have building cover as a condition of your loan. Home insurance can be lifesaver in dire circumstances, but it isn’t until something happens that you appreciate it. Until then, it feels like a big expense and would probably be one of the first you dropped if you were trying to slim down.
But home insurance is a valuable safety net. You might decide that contents insurance isn’t as important, perhaps you take the view that you can easily replace possessions. Buildings insurance is another story, as it protects you from major damage that could cost a fortune to repair. Fortunately, there are ways to save money on home insurance and ensure that you’re not paying more than you need to.
Thanks to the Seattle Municipal Archives for the photo
Create Your Own Insurance
A simple option is to avoid paying for a home insurance policy altogether and create your own insurance. By placing a small amount of money into a high-interest savings account each month, you can create your own cushion in case of disaster. If you need to repair something, you can pay for it with your savings. You can also combine this method with an insurance policy with a high excess. This will save you money, and anything under the excess you can pay for with your savings.
When you take out a mortgage, your lender will often require you to have home insurance. Although they will offer you a policy, you don’t have to take out the one they provide. You can shop around for a cheaper policy by yourself. As long as you have the insurance, that’s what matters. You can also avoid overpaying by covering the rebuild value of the house, which is the cost of rebuilding it if it were knocked down. Covering the market value (the amount the house sold for) could be over-insuring. Just because an estate agents in Leicester valued your house at a certain amount, doesn’t mean that’s the value you should cover.
Cut Down Your Premium
You can cut down your premium by reducing the risk of damage or disaster in your home. You will have to try to balance making safety improvements with savings on your insurance. Some things that may affect your premium include your age, whether you have made any claims before and your lifestyle. Installing approved locks on doors and windows and approved burglar alarms can also help.
Of course, the way to really save money on your home insurance is not to have any. But when your house sustains damage, and you can’t pay for it, it will be too late to wish you had taken out a policy.