Time to home in on the cheapest insurance MARTIN LEWIS
MILLIONS are wasting
£100s overpaying for home insurance, as they leave the bill to fester year-after-year, getting ever more costly.
Home insurance is a prime area where companies use ‘price walking’ – where if you stick with them, every annual renewal, they walk the price up and up and up.
If you haven’t switched in over a year then check asap, as savings by switching can be far bigger than any exit penalties. But if you’re coming up for renewal soon, then the best time to get a new quote is around 21 days before renewal (a couple of days either side is fine), so get this in your diary.
Here are my five steps to cheaper home insurance:
STEP 1: Define the right cover
THERE are two elements to home insurance.
First is buildings cover. Many over insure, as they look at their house’s value, but you only need to reinsure the ‘rebuild cost’ (the amount it’d cost if you knocked it down and rebuilt). There’s a calculator at abi.bcis.co.uk
Secondly, there’s contents cover. Many under insure thinking “I may have £20,000 worth of stuff but I’d never claim that much”.
Again, a mistake. If you’ve only insured half the value, a claims insurer may only pay out half the claim.
STEP 2: Combine multiple comparison sites
COMPARISON sites are a quick and easy way to find cheap quotes if you have relatively normal circumstances.
Yet in truth they’re not actually comparison sites, they are marketplaces, as they can have special deals and prices with different insurers (as long as they’re not more expensive than going direct).
So, the best thing to do is to combine a few of them to get a wide spread of insurers and prices.
STEP 3: Check insurers that comparison sites miss
TWO of the big insurers aviva.co.uk and directline. com aren’t on comparison sites, so check them too. They can win for some.
IN MOST cases there’s no such thing as ‘paying monthly’. Insurers pay the annual fee for you via a loan, which you then pay back each month for a year, plus a hefty whack of interest.
So, avoid paying monthly if you can. If not, check the interest rate, you may be better off paying it with a 0% credit card.
Plus, if struggling to keep up monthly payments due to coronavirus ask your provider for help.
STEP 5: If you want to stay where you are, haggle
ONCE you’ve found a cheaper policy – try taking the price to your existing provider and ask them to see if they’ll match it.
In the last poll I did, 81% of customers who haggled with Admiral said they had success, while 71% did with Hastings Direct and 68% did with LV. So, it’s worth a try.
You can find more detailed help and options at mse.me/ cheaphomeinsurance guide
■