Home Insurance: What to Watch for

With the home insurance market becoming increasingly competitive, many companies will seek to draw your custom by advertising ‘the best’ deals. However, there are often hidden extras attached that could leave you under-insured and paying more. Here’s how to avoid being conned when you take out a home insurance policy.

Avoid ‘tie-ins’

When you take out a mortgage on your home, some mortgage lenders will include a compulsory home and mortgage insurance policy. These are likely to be far more expensive compared with similar policies, and may cost you up to £150 per year in increased premiums. Often, your mortgage company will charge you a fee if you choose to insure elsewhere – but this is likely to be less than you would save by switching home insurers. When choosing your home insurance, you should always shops around. Often, you will find the best rates on comparison websites like uSwitch, or with large home insurers such as Churchill. Always get three quotes before committing to a particular policy.

Beware ‘non-disclosure’ penalties

‘Non-discloser’ is when you fail to mention to your insurer a fact that would have affected the outcome of your insurance application, for example by increasing your premium or by leading to a refusal to insure. By failing to disclose even a minor fact, you may find that your insurance policy is rendered invalid. Around one in ten insurance claims are rejected for non-discloser, but if you have left out information innocently or inadvertently then the company is more likely to be lenient.

Don’t buy more than you need

Take out the level of home insurance that is appropriate for you; not too much and certainly not too little. Some home insurers may encourage you to take out more insurance than you need – if you have no dependents, for example, then a policy which includes life insurance is probably unnecessary. Make sure you find out what cover a policy offers and compare prices accordingly.

Does you policy really cover you?

Some unscrupulous insurers may sell you a policy which you are not entitled to claim on. To avoid this, ask them to confirm in writing that your particular circumstances are covered. By sticking to reputable insurers, such as Direct Line or the Co-operative bank for home insurance, you can also be sure that you aren’t being ripped off.
Save with multiple policy discounts.
Find out with your home insurer offers discounts to customers who maintain other insurance contracts under the same roof. You may find that you can save by taking out health or car insurance with the same company. Make sure you compare other prices, though, before committing to this kind of deal.