We all want to protect the things in our lives that mean the most to us, most importantly, our families, homes and possessions. Insurance is therefore vital in providing a financial safety net in the unfortunate event that something does go wrong.
Home insurance is especially more of a necessity rather than a luxury these days. In fact, many mortgage lenders insist that appropriate cover is arranged prior to completion of purchase - even large financial institutions need to protect their investments.
There tends to be a few misconceptions when looking into home insurance quotations. Our job is to not only advise you of the best cover suited to your needs, but to also ensure that we offer you the best value for money.
These are just some of the ways we ensure you have the most suitable protection, with the confidence that this has all been offered at a competitive premium.
1. Insure the rebuild value of your property not the market value
A property should always be insured for the cost to rebuild it, not the market value. Typically the rebuild cost will also be a lot less, so if the market value was to be used, this could be inflating the rate of premium and you would therefore be paying for more cover than you need.
It is however important to be aware that the rebuild cost is not purely the bricks and mortar. The cost of clearing the site and any professional fees, i.e. architects fees, will also need to be factored in.
2. Avoid underinsuring your contents
Many people tend to underinsure the true value of their contents in the belief that this will help lower the premium – they then think that in the event of a total loss, like a fire, the insurers will just pay up to the sum insured stated on the policy. Unfortunately this is not the case.
Firstly, almost all policies carry a condition called an ‘Average Clause’. This means that in the event of a total loss, if it is found that the contents of the home have been underinsured, the insurers have the right to reduce the total claim amount by the percentage that has been underinsured. So in fact, this will result in the insurers paying out less that the sum insured on the policy.
3. Increasing the policy excess
From an insurer’s point of view, a higher policy excess means a reduced risk to them, as it minimises the number of small frivolous claims and therefore gives the impression that a claim on the policy is less likely. As this will obviously be of some benefit to them, their offering in return is a reduced premium.
The level of discount provided can differ between each insurer, so it can be worth comparing a number of alternative quotations.
4. Online comparison sites are not always cheaper
It would not be fair to say that all insurance policies provided online are of poor value. In fact, a number of the insurance companies we use ourselves actually have online quoting facilities. What many people may not realise however, is that the majority of the covers provided on these ‘cheap’ sites are shortened and so leave you with very minimal cover. Which then begs the question, is it worth it?
Unlike direct insurers, our job as a broker is to advise you of the cover you are paying for and what approach may be best for you. If it is minimum cover at a minimum premium that you need, that is absolutely fine, as long as we can then have peace of mind that this is what you are actually looking for.