Make Big Savings on Your Home Insurance

As the old saying goes 'A man's home is his castle' and while guards and a moat may seem a little excessive it's still important to protect it best you can; the most effective way to do this is with a quality insurance policy. Quality however does not have to mean expensive - it's possible to significantly cut the cost of your home insurance premium and protect your house and its contents with relatively little effort. Here's how....

Home insurance is the collective term for buildings and contents cover; in order to save money and make sure you are still adequately covered you need to assess your needs for each type of insurance individually before you start searching for quotes.

Buildings Insurance

Buildings insurance provides cover for your house, its immediate surroundings (i.e. garden and permanent outbuildings) and any permanent fixtures and fittings it contains. It is only needed if you actually own your property - if you are renting your landlord should provide this cover.

The vast majority of mortgage lenders require you to take out buildings insurance so that their investment is protected should your house become irreparably damaged. While it's likely that your mortgage provider offers their own insurance, its incredibly unlikely that this is going to be the cheapest option available to you. By shopping around you should be able to find a much more competitive quote.

If your current policy is with your mortgage provider you should be aware that they may charge you a release fee when you switch. While it is always better to pay this upfront rather than adding it onto your mortgage you should take this cost into consideration when calculating the option that is going to provide you with the best value for money.

When taking out buildings insurance you will be asked for the rebuild value of your home, this is not the same as the market value of your home and with house prices as they are at the moment is likely to be much less. You should be able to find the rebuild figure either on your mortgage statement or your property deeds. Making sure you quote the correct figure can save you a significant amount, however, if you have done a lot of work on your house or have been in your property for a long time you may like to enhance the quoted figure slightly just to ensure that you are adequately covered.

Contents Insurance

Regardless of whether you own or are renting your property you should have contents insurance; this covers everything that isn't a permanent fixture.

When obtaining quotes for this type of insurance you will need to specify a 'sum insured'. This refers to the maximum amount the insurance company will pay out in the event of a claim and needs to be sufficient to cover the replacement cost of all of your belongings. It really pays to take some time and work this out as it will mean you are adequately, but not over, covered so that you only pay for the financial protection you need. The best way to do this is by listing the items in every room of your home along with their approximate value. You should look for policies that offer new for old replacement cover for the best value for money.

Most insurance providers offer 'add-ons' such as home emergency cover, legal protection and personal belongings away from home, and while these can be beneficial (if you actually use them - many people pay for them but don't even realise they have them!) they do come at an extra cost so its definitely worth looking into before you opt in. Check that legal protection isn't already included in your car insurance policy to avoid being covered twice, make sure the benefits included under home emergency are ones that you are likely to need (and the maximum claimable amount is large enough to make it worth your while) and, if you insure your personal belongings away from home make sure that you take advantage of this as many travel insurance providers will offer discounts on your premium if your luggage is covered under your home insurance.