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Alongside your home buildings insurance, contents insurance protects your possessions should the worst happen. While home buildings insurance will cover repairs or rebuilding of your home in the event of damage caused by such things as fire or flooding, your possessions inside the home are only covered by contents insurance.
You may already have contents insurance – either combined with a buildings insurance premium or a standalone policy – you may be looking to insure your possessions inside your first home or you simply want to move to a better deal. Whatever your situation, there are steps you can take to reduce the cost of contents insurance but only after you’ve worked out what the minimum amount of cover you require is before you start getting quotes.
While it may be tempting to go for the cheapest premium, remember that going down that route might mean that you are not fully covered and, in the event of major damage or theft, the policy might not cover the full cost or repair or replacement. You will have to make up any shortfall out of your own pocket.
If you’ve got your first mortgage, then your provider may offer to insure your home and contents for you. But don’t immediately take this offer as it is likely that it won’t be the most cost-effective.
Here are the five top ways of saving money on your home contents insurance premium:
A lot of insurers will give you discounted premium if you take some relatively simple steps to improve security. That means pretty much anything which makes your home less attractive to burglars, makes it more difficult to break in or increases the likelihood of them being caught if they do.
Joining your local Neighbourhood Watch scheme is one relatively straightforward option and most insurers will apply a discount if you can provide proof of your membership. If you live in a high-crime area where your postcode will count against you when looking for insurance, joining a Neighbourhood Watch scheme is probably the easiest way of reducing your premium.
In terms of security, improved lighting outside to eliminate dark areas immediately around the home and installing BSI approved locks on all outside doors and windows.
Alarms are probably the things that will get you the biggest discounts but only if they are approved by the National Approvals Council for Security Systems. One of these could get you a discount of as much as 10 per cent off your premium although it has to be said that this is unlikely to cover the cost of the alarm, particularly if you have it installed professionally.
CCTV systems may also get you a discount but, again, these should be approved and installed professionally to qualify.
If you don’t claim for minor things – particularly accidental damage like a red wine spill on the carpet, then you may be entitled to a no-claims discount. Not every insurance company will offer this but these are often transferable between insurers and will mean that you get a cheaper quote when you are looking to change.
You might think that shopping around and dividing your home insurance from your contents insurance will result in lower total premiums but this is by no means always the case. Many companies will offer you a discount if you insure them through the same policy. And if there’s a major event – like a fire or flooding – then it will be less complicated claiming than if you have to deal with two insurers.
Monthly premiums can be expensive – anything between 5 and 10 per cent higher than if you pay for your insurance annually. A small number of insurers will let you pay monthly without adding extra charges but most treat this as a credit charge and will add interest to your premium.
As with car insurance, increasing your voluntary excess will mean that you will have lower payments to make on the policy premium. Most insurers will impose a compulsory excess – which is usually around £250 – but allow you to top this up voluntarily. The savings can be quite large but make sure that you can afford to cover this shortfall which will be deducted from any payout should you make a claim.
Oliver Jones has written for Solution Loans since 2015. His passion for personal finance comes through in the 150+ blog posts he's written since that time. His talent for explaining all things money means he's covered topics as diverse as...Read about Oliver Jones
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