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How to Choose Home Insurance

You should spend time looking at your options when choosing your home insurance. The market is full of choices, and the price of your home insurance can vary widely. Going after the cheapest option can be a mistake that leads to more harm in the long-term. Here is a quick look at the essential things you should focus on when navigating the home insurance market.

How to Choose Home Insurance
Krista Lomu
· 5 min read

You should spend time looking at your options when choosing your home insurance. The market is full of choices, and the price of your home insurance can vary widely. Going after the cheapest option can be a mistake that leads to more harm in the long-term. Here is a quick look at the essential things you should focus on when navigating the home insurance market.

What Is Home Insurance?

Before you start browsing for home insurance quotes, you should get back to the basics. What does your home insurance do?

Your home is divided into two parts when it comes to insurance purposes: buildings and contents. They work like this:

  • Building insurance – covers the building or buildings, including permanent fixtures and built-in appliances. Coverage includes damage to property caused by fire, floods, storms, falling trees or branches, vandalism or malicious damage, any impact from vehicles, and subsidence.
  • Contents insurance – covers your belongings, including clothes, appliances and furniture. Your belongings are covered against theft, fire damage, flood damage, earthquake damage, and vandalism.

Homeowners tend to need both covers, and you’ll need both covers if you have a second home. Home insurance for your second home might come with slight variations to coverage and cost, especially if you are renting out your second home.

If you live in rented accommodation, your landlord should have the building insurance covered. You only need to get contents insurance for your things.

While it might seem the easiest to get the two covers from the same provider, this isn’t something you have to do. Your building and contents insurance can come from a different provider, and it could be cheaper to buy them separately.  In general, combined building and contents insurance is the least expensive for most homeowners. Policy providers tend to offer a discount when you buy from a single source,but it can be worth looking around for separate policies.

Read the Home Insurance Small Print

Just because building insurance generally covers flooding damage or content insurance applies for appliances, you shouldn’t assume these things apply to your chosen insurance. Reading through home insurance policies is not quite as exhilarating as going through the Booker Prize winners, but it is a crucial thing to do.

Before you commit to paying, you should be aware of what you are paying for. You should check for the following things:

  • What is covered and against what types of damage or conditions?
  • Are you covered for a monetary amount or a replacement product?
  • What are your monthly or annual fees?
  • What is the claim process, and how does making a claim affect your insurance costs?
  • What is the cancellation policy of your home insurance?

Make sure to read the terms and conditions a second time before you sign the contract.

Use a Valuation Calculator to Know Your Needs

Assumptions are also dangerous when it comes to valuing your buildings and contents. Estimating your valuations could cause you to pay too much for your policy. You could also end up with insurance that doesn’t cover enough when problems occur.

The vital thing to know about setting the value of the building insurance is that you need to give the rebuild value and not the market value. The rebuild value is the cost of rebuilding the property from scratch, while the market value is the cost of buying the property if you put it on sale.

You can find a residential building cost calculator on the Association of British Insurers’ website to get an estimate of the rebuilding costs. You could also have a commissioned surveyor value your property for building insurance.

When you are considering the value of your contents, you should avoid underinsuring. Create a list of items you have and think about the cost of replacing them from furniture to appliances.

Compare and Shop Around for Home Insurance

When you understand what home insurance policies entail, and you identify your needs, you are better placed to start looking for policies. The best way to find home insurance is by comparing different policies, both by using comparison websites and by contacting the providers directly. You should shop around and get quotes based on your valuations.

It’s also possible to use insurance specialists, although it’s important to understand what you are getting if you hire one. Some specialists might offer policies by only specific providers, for example. If you are using a broker, then you should use a credited broker found on the British Insurance Brokers’ Association website.

Tips for Finding Cheaper Home Insurance

When you are comparing for home insurance options, you want to ensure:

  • You are paying for what you need, and
  • You have chosen the cheapest policy to cover those needs.

If you keep these points in mind, you can find home insurance that works for you. You can further lower the price of your home insurance policy with these little tricks:

  • Be a low-risk customer by improving your home’s security. Install high-quality locks and a burglar alarm to save money.
  • Pay annually rather than in monthly instalments.
  • Adjust the excess, which the amount you have to pay when you claim. Higher excess often results in lower premiums. However, you don’t want to go too high as it could make claiming pointless or too expensive.

Can You Change Your Home Insurance?

You shouldn’t pick home insurance and stick with the same policy for the rest of your life. It’s important to choose home insurance carefully and continue to compare the options now and again. This can ensure you continue to get the most value with your policy.

Insurance providers often offer the best deals for new customers. You don’t want to just accept climbing premiums. As a loyal customer, you should get a good deal too!

Make it a habit to check home insurance options and contact your policy provider if you find better deals. Telling your current provider you have found a better quote can make them offer you a better deal. However, check the cancellation policies and understand whether you might have to pay extra for leaving your provider.

Krista Lomu
Krista Lomu
Krista has been writing about finance for nearly a decade. Based in London, she hopes to turn even the most complicated topics to approachable and interesting for readers. When she's not writing and working with small businesses, she likes to read, watch football and play games - fuelled on by many cups of coffee!
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