National Society

Whether you are shopping around and comparing home insurance quotes as a new homeowner, or looking for a way to lower your current house insurance premiums, there are steps you can take to reduce your monthly house insurance payment.

Taking the time to compare home insurance quotes is probably the simplest and quickest way to reduce premiums.  Visit various insurance websites and take advantage of the instant quotes they offer. You might also think about purchasing your car, house, and/or life insurance policies with the same insurer. Very often companies will reduce your premium if you buy more than one policy.

Improving the security of your home and property is an almost definite means to lowering your premium. Installing a burglar alarm, sprinkler system, or new locks on windows and doors are all measures that can reduce premiums. Another idea is to establish a neighbourhood watch group in your area.

Raising your deductible is another option if you are seeking to minimise that monthly cost; the higher your deductible, the lower your premium. Increasing your deductible twice over, may save you as much as 25 per cent. If this is an affordable option for you, it is an easy way to cut monthly costs.

One last alternative is checking the value for which you have insured your house. Buildings insurance covers only how much it would cost to rebuild your house from scratch, so do not include the value of the land on which your house is situated.

Your monthly premium is certainly not a fixed rate. With some smart choices, you can reduce it and save money.

Over five million people in the UK live in properties at risk of flooding from the sea or rivers.  In the floods of 2007, around 55,000 homes and businesses were flooded leading to nearly £3 billion in insured losses.  Many insurance companies will offer flood insurance as a standard part of your buildings insurance package.  This is one less thing to worry about for most of us, but if you live in an area prone to flooding, it may be a good idea to take out an individual flooding policy on your house insurance. 

If you are unsure about the risk of flooding in your area, you can check the environment agency’s flooding map.  In normal circumstances, if the risk in your area is classed as ‘low’, your house insurance should cover flood damage as a matter of course, though it is certainly worth checking with your insurer.
 
Flooding insurance is widely available across the UK, though the amount of cover you can buy will vary.  This is usually determined by the level of risk posed to your property and is influenced by factors ranging from what your local council is doing to prevent flooding to any removable flood defence products you have bought for your home.  Your insurance company may also ask for an independent risk assessment before settling on your premium.

Whatever your position, it is best to be prepared.  Always be aware of what you are and are not covered for, and doing some research can really pay off when it comes to cheap home insurance premiums.

Given the amount of investment we put into our homes, the importance of safeguarding that investment against damage or loss comes as no surprise.  There are some 620,000 home insurance claims each year, averaging in the hundreds of pounds.  With the cost of repairs often much higher than many can afford, it is no wonder that home insurance is vital for the modern homeowner.

Home insurance normally comes in two separate forms, though they can be bought together in one policy.  Buildings insurance covers the cost of damage to your property’s structure and permanent fixtures both indoor and outdoor.  Premiums are calculated by considering the cost of your home to rebuild (though this is usually lower than the market value).  Buildings insurance normally covers various forms of damage, most commonly; damage from the weather, floods, and fire, damage by malicious intent including vandalism, subsidence, and damage caused by vehicles, trees, or aircraft.

Contents insurance is based on the value of possessions inside the house and ranges from jewellery to televisions.  This is usually calculated by the homeowner and involves a ‘sum insured’ that represents the total value of the house contents. 

Whilst it is possible to buy the two together in combined policies, it common that only buildings insurance is purchased alone as this is the cover required by mortgage lenders.  Different policies vary in cover, as do the needs of each customer, so be sure to shop around to find the best possible deal.

Coverage for your home is a given with home insurance.  What happens if you are displaced while your home is being repaired?  Be sure your policy includes ALE, or Additional Living Expenses, coverage.  Without this, you are responsible for all living expenses while your home is being repaired.

Coverage

ALE coverage includes hotel costs or apartment costs for long term situations.  It also includes other living expenses such as utility bills for apartment or rental situations, an allowance for food and coverage for laundry bills.  It sometimes even covers the cost of clothing if your clothing was lost when your home was damaged.  ALE does not cover mortgage payments.

Coverage Amount

The actual coverage amount varies based upon your insurer.  Most insurers provide ALE coverage based on a set percentage of your home’s rebuild value.  Others have a set limit.  Once this limit is reached, coverage ends.

Check your ALE coverage carefully for any exclusions or limits.  For instance, your ALE coverage may only include hotels, but not apartments.

Filing a Claim

If you find yourself in need of ALE coverage, you must file a claim just as you would for home repairs.  You can contact your home insurance provider for the necessary paperwork.  To determine your living expenses, include the cost of where you are staying, any expenses for tasks you have to do elsewhere such as laundry and other expenses you wouldn’t have if you were at home.

When it comes to landlord insurance there are many different covers. Some include both contents and buildings insurance, whereas some do not.

If you are looking to rent or let a property for the first time, take your time to research existing landlord insurance policies to find the one suitable for you.

From February 2005, letting agents are no longer legally allowed to advise you to buy a certain insurance cover, or sell you a particular cover unless they are authorised to do so by the Financial Services Authority (FSA) or they are directly regulated by a broker who is registered with the FSA.

High-Risk Tenants

It is possible that a mortgage lender or general insurer decides not to grant cover to your property because of the tenants you wish to rent your property to. Be aware that renting your property to students, multiple single sharers and people who receive state benefits will make it harder to find a company to grant you a suitable landlord insurance.

Don’t Forget!

If you fail to inform your insurer that you are letting or renting a property within a certain period of time, your claim could be affected. As the landlord, you are responsible for insuring the exterior part of the building as well as your own contents, fittings and fixtures.

Some people get confused at the different forms of insurance available for their home. For example, there is buildings cover and there is also contents cover.

The simple difference is that the buildings insurance is exactly what it sounds like – it covers the actual building and nothing else. Contents cover is everything that is inside it that is not nailed down, as the saying goes. Most people will look for both.

When you are looking for home insurance quotes, look for each type of home insurance in turn. For example you could start with buildings insurance and then move on to contents insurance. Neither one is required by law; although in practice most people need buildings cover in order to be approved for a mortgage on their property. If you are going to get both types of insurance look out for potential deals for getting both with the same company. This can be a good money saver and it can also make life easier for you as you will only have the one company to deal with.

Once you have the difference between the two types of home insurance clear in your head, you can look for home insurance quotes that will suit you. Most companies will provide the basic details of their policies for you to look over before you get a quote. You may find this useful too when it comes to comparing different ones.

When you apply online for a home insurance policy, you will receive a quotation based on the information you give the insurance company.  You must make sure all the information you provide is accurate, otherwise the quote you receive might not match up with your requirements.

It is also your responsibility to check all the details of any quote you receive as this will enable you to make sure they are correct.  If you spot any errors, be sure they are corrected before you agree to take out a policy. In addition to this, you should check all the information given when you do agree to a specific policy and your documents arrive in the post. It is very rare for any errors to be made but you should always have the peace of mind that you have checked everything thoroughly.

For instance, you may have provided a certain piece of information in good faith when you asked for the home insurance quotation.  However, if you later discover this information is incorrect, you must bring this to the attention of the insurance company. By making these checks before you start paying the premiums for a policy, you will be able to ensure the changes are made in good time.  This will speed up the process of getting exactly the right policy agreed with you, so your monthly premiums can begin.

The FSA, or Financial Services Authority, is an independent organization that helps to regulate and protect consumers from financial institutions, including insurance companies, in the UK.  They have standards that each institution must adhere to in order to be listed as a reliable business.  From helping you choose the right home insurance provider to covering you if something should go wrong, the FSA is there to help you.

A Reliable Provider

Trying to determine whether a home insurance provider is reliable can be difficult.  Testimonials can be faked and many newer companies have yet to develop the credibility of older companies.  This is where the FSA steps in.  A reliable insurance provider is one that is regulated by the FSA.  The company must meet certain standards to remain in good standing with the FSA.  This information should be listed on the company’s website or you can ask if they are a regulated business.

Coverage No Matter What

If you file a claim, only to have your home insurance company go bankrupt suddenly, the claim will not be paid by your provider.  They are no longer obligated to pay anything to their members.  The FSA looks out for the consumer by providing compensation for claims through the FSCS, or Financial Services Compensation Scheme.  The FSCS is a compensation fund established by financial institutions.  The object is to help consumers who have already filed a claim get the coverage they were originally promised.  This bit of protection allows consumers to feel better about choosing a home insurance company.

Most people are familiar with how home insurance works; landlord insurance is similar but with a number of differences.  Landlord insurance is specifically aimed at people who are renting out a property they own and is designed to cover many of the things that landlords usually deal with.  It is aimed at covering landlords against situations they usually would end up paying for – such as maintenance or the destruction of property by their tenants. 

There are different features available from different insurers although many feature buildings cover.  Some forms of insurance will include public liability which will pay out costs should one of your tenants successfully claim against you for an injury.  There is also contents cover which can ensure that the furniture being used by your tenants is covered in the event of damage.  Many insurance providers will offer accommodation costs in the event that your property becomes uninhabitable, perhaps due to fire or flooding.  Usually glass and lock insurance is covered as standard within your policy.  Whilst all of these facilities may be available in your policy it is very important to check the financial limits on your policy to ensure that you are covered to the appropriate value of your house. 

Whilst this may not be an issue for some properties, landlords who have multiple properties, such as flats within a block of flats, should carefully examine the total financial security they are offered with their present landlord insurance.

Homeowners who decide to undertake a remodelling project would be wise to consider their home insurance policy in the planning stage.  For one thing, if you anticipate that the value of your property will rise after the remodel, talk to your agent about changes in coverage.  Improving your property without a change in coverage could leave you underinsured.  If you subsequently suffer a loss, your building cover might not pay what’s needed to rebuild.

Another consideration is how much of the remodel you’ll accomplish yourself.  Unless you are a license-holding professional, major work should be left to professionals.  Unfortunately, too many homeowners have tackled more than they should have and suffered a loss as a result.  If you take down or move a load-bearing wall and your home is subsequently damaged, you’re likely to discover that your policy excludes payment for this type of problem, since it was completely avoidable.  Leave the major work to professionals.  There is usually plenty of other work in a remodelling project for homeowners to accomplish without tackling something that could invalidate your policy.

Speaking of remodelling professionals, when hiring someone to do work for you, take the time to check their licensing.  Just because they say they have a license doesn’t mean that’s still true or that the license is still in force.  Unfortunately, many homeowners have hired a ‘licensed’ professional to discover later that he or she was not licensed.  A few minutes on the phone to your local Citizens Advice Bureau should point you in the right direction for the specialty of the contractor you’re considering hiring.