How to reduce home insurance costs

What affects home insurance costs and how to save


What affects home insurance costs?

When you’re in the market for a home insurance policy, it can be useful to know what factors influence the price you pay. These vary by insurer, but typically include:

  1. Your location (this includes the crime rates in your area)
  2. Property type (this includes any non-standard features to your home that could put you at higher risk of flooding or fire, like a flat or thatched roof)
  3. Your risk factor for floods and subsidence (this includes any history of these events)
  4. Your living habits (whether you’re away for long periods of time)
  5. How secure your property is (insurers will consider the locks you have, alarms and other security features)

Another main factor affecting the price you pay is the rebuild value of the property and contents you’re covering. How much cover you choose to take will greatly impact the overall cost of your policy.

How to save on your home insurance

While some pricing factors are out of your control, there are ways you can pay less for your insurance without compromising on cover.

Just bear in mind that if you opt for a basic policy to save yourself money in the short-term, it could end up costing you more in the long run if you have to pay out of your own pocket when events occur that aren’t covered.

As long as you’re realistic about both your insurance needs and your budget, you should be able to find cover that’s right for both your home and your wallet.

Compare home insurance quotes

If you’re in the process of buying a property, it’s likely that your mortgage provider has recommended one of their home insurance policies.

While it can be tempting to go with the easiest option, it’s important to shop around to see if you can get a better deal elsewhere.

One of the ways you can do this is to speak with a broker. Brokers work in a similar way to comparison sites, except they take a more personal approach to offer advice as well as quotes.

They can present options you may have not considered, using their specialist knowledge to help you understand how much cover you might need.

If you’re interested in using a broker, you can speak to the insurance team at Wesleyan Financial Services.

Work out the right level of cover

The main factor influencing how much your insurance will cost is the level of cover you choose to take, which is why it’s important to get it right.

You may think that the more cover you take out the better, but you could end up paying for more than you actually need. You also run the risk of going the other way and ending up under-insured. This means you won’t be able to claim for the full amount you actually need.

To work out your cover level you should consider the value of your property and contents, which events you’d like to be covered for and if it’s worth adding payable extras to your policy to boost your cover. For example, some providers offer home emergency assistance at an additional cost.

You can find out more about taking a DIY approach in our guide to home insurance.

If you instead choose to use a broker, they’ll assess your needs and recommend a cover level to you.

Choose how you pay for your policy

Generally speaking, choosing to pay upfront for the year will cost you less than paying in monthly instalments. This is because providers often charge interest on monthly instalments, which bumps up the overall price you pay.

You can usually choose your payment terms when you get a quote. You can check with the policy provider if they charge interest on monthly repayments. If they do and you can afford to pay upfront, doing so will save you money in the long run.

While interest rates vary depending on the provider, you could end up paying an annual percentage rate of up to 40% of your annual premium.

Consider increasing your excess

This isn’t for everyone but increasing your excess (paying more when you make a claim) could reduce the overall price you pay for your policy.

If you don’t think you’ll need to make many claims over the course of the year, this could be the way to go. You’ll need to factor in that small claims won’t be worth making if they’re close to your excess amount. In these cases, it’s often better to cover the cost yourself.

If you choose to increase your excess, you’ll need to make sure it’s an amount you can comfortably afford. You can discuss this with your insurance provider when you get a quote to see what effect it’ll have on your overall insurance premium.

Look for loyalty or member discounts

Some providers and brokers reward existing customers with exclusive discounts. For example, if you don’t make a claim on your home insurance for the full year, some providers will give you a no-claims bonus. You can build this up for every year you don’t make a claim.

At Wesleyan, we offer exclusive discounts for our members across a range of products. If you’re a member, you could be eligible for a 20% discount on a range of insurance products, including standard and high-value home insurance.

Reduce your risk for insurers

While you can’t predict when you’ll need to make a claim, there are ways you can present yourself as less of a risk to insurers. You may need to invest time and money to achieve this, but it could save you money in the long run.

For example, taking precautionary measures to make your home more secure will help deter burglars. You can do this by installing security lighting, CCTV, a burglar alarm and fencing if necessary.

You can also reduce your risk of structural damage claims by keeping on top of property maintenance. This includes taking care of any issues as soon as they arise, which includes your grounds.

For example, if you’re in a high-risk area you might want to protect your home against flooding. Or if you have trees on your property, you may need to remove any that could affect your home’s foundations.

If you do have a history of subsidence or your home is of unusual structure, you may need to take out a specific policy that’s designed to cover your additional needs. 

When is the best time to renew home insurance?

If you have a home insurance policy that’s due to renew but you aren’t happy with your new price, you should also shop around.

To make sure you have enough time to search the market, you should aim to start at least a few weeks before your policy is due to renew. Leaving your search to the last-minute means you’ll likely have less options and you could end up paying more than you’d like.

If you’re not yet ready to renew but you’d like a broker to search the market for you closer to the time, you can share your renewal dates with our insurance team.

Ready to get insured?

Home insurance

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High-value home insurance

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Holiday home insurance

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