Home contents insurance cancellations rising due to recession

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A recent report published by the ABI shows that nearly a quarter of people have cancelled or not renewed their home contents and buildings insurance policies in the last 12 months in order to save money.

With the exception of motor insurance which is a legal requirement and home buildings insurance if you have a mortgage, there is no other obligation to have home contents insurance and many consumers are paying out for months if not years for insurances that are rarely if ever claimed upon, so in the current lean times, it may seem the logical option to cancel. 

However by taking the philosophy of “it will never happen to me” and cancelling, householders are leaving themselves exposed to potentially thousands of pounds of bills should the worst happen and there is no cover in place.
By following the tips below householders can ensure they are protected should the unfortunate happen and still make savings on their annual premium by finding the cheapest quotes and comparing policies.

1.Install an alarm - Not only will having an alarm installed in your home act as a deterrent to any would be thieves, it can also save you money on your home insurance as many home insurers will give a discount if you have a burglar alarm installed, particularly if it is monitored or NACOSS-approved

2.Fit British Safety standard door and window locks – Many insurers will give discounts if you have door and window locks that are fitted to BS3621 standard.  This will be identified by looking for the British Standard kite flag mark on the lock.

3.Don’t over insure – Calculate the value of your belongings carefully, brit’s spend hundreds of pounds each year through over estimating the value of their property and its contents.  Similarly however, don’t underinsure and leave yourself liable for any shortfall in the event of a claim.

4.Consider increasing your voluntary excess – The more you are willing to pay in the event of a claim the less your annual premium will be; so instead of cancelling and leaving yourself at risk,  increase your excess and whilst still covered your premium will also reduce

5.Shop around – Always look around to get not only the best possible premium but also the best level of cover.  The insurer that’s good for your car may not necessarily be good for your home insurance, so always compare each provider on what they are offering.  Beware too of the various cover options that are available, some insurers will have cut price offerings by stripping out certain benefits.

6.Flooding – Unfortunately for a growing number of the population flooding is an ongoing threat to our homes.  Although insurers will cover any flood damage beware of any caveats within your policy around flooding.  For example you may live in a flood risk area, in which case some insurers will implement different terms if you suffer flooding.  An insurer will also expect you to work to prevent a claim where possible, so should you fall victim to floods, where it’s safe to do so move any valuables upstairs out of harms way to minimize any claim you’ll have to make.

7.Beware of any “add on’s” which maybe sold with your policy – For example, when you have bought your policy, your insurer may suggest you take out legal protection cover, key cover or home emergency cover.  Whilst these are all valuable policies and for some people are vital to be held, others may not necessarily deem them as important as just having their home and contents covered.  Additionally, you may also find that you have this “add on” cover already elsewhere as some bank accounts and credit cards include these as benefits.

8.Watch what you claim for – If you spill something on the carpet, or burn the sofa, it’s all too easy to think that the insurance will cover the cost of the repair or replacement of the item in question, however before filling in that claim form, think of the true cost of your claim.  Not only will you have to pay an excess, but you’ll also stand the possibility of losing any no claims bonus you have earned which could take several years to reach back, coupled with the fact you will need to declare the claim to any further insurers for up to 5 years, suddenly your claim for several hundred pounds has become a lot more!

It may seem appealing to cancel a policy and instantly save ourselves some money each month, however this approach could prove disastrous if something happened leaving you to cover the cost of any repairs and replacements of belongings.  Instead by taking 5 minutes to compare cover, significant savings can be made whilst at the same time continuing to protect your property.

2009-06-25 13:36:07 © Moneyextra.com

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