Donna Werbner looks at how to find a tip-top home insurance policy and how to keep your premiums as low as possible.
Several years ago, my parents almost burnt down their house.
It was a chip pan fire, three days before Christmas, and it set the entire kitchen alight. As the entire family waited outside for the fire engine to arrive, watching the flames lick up the walls, my mother suddenly almost involuntarily made a move to run back into the burning building. "My house! My house is burning down!" she wept as we held her back.
Imagine all your worldly possessions all of them being destroyed before your eyes and you might be able to get a sense of how my mother felt at that moment.
Luckily, the fire engine arrived quickly and no one was hurt. The entire kitchen had been destroyed, however, and smoke had blacked out every single wall.
Until this point, I had never seen the need for or the value of -- home insurance, in action, so to speak. And since then, I have naturally been a big fan!
It seems to me that, if you care about your home and your belongings (and who doesn't?), home insurance will provide you with peace of mind, if nothing else. And that is well worth a few hundred pounds a year.
But how do you distinguish a good home insurance policy from a bad one? And how do you keep the costs of your premiums down? Here are my eight top tips:
How To Spot A Good Home Insurance Policy
1. Unlimited cover. Some insurers will ask you to estimate the value of all your belongings and the cost of rebuilding your property. If you under-estimate this figure (which, after all, is very difficult to calculate), the insurer will then refuse to pay out the full cost of replacing any items/rebuilding the property if you make a claim. So look for a good policy that offers unlimited cover, given as standard by insurers such as Abbey or Halifax. This ensures the cost of replacing your home or possessions is guaranteed to be paid out in full (although, on the contents insurance policy, there is likely to be a £1,500 limit on individual items).
2. Emergency repairs cover. Some insurers provide home emergency repairs cover. This will pay for the cost of fixing your boiler in an emergency, for example (however, it is possible to buy this cover separately from companies such as Homecall+).
3. Christmas cover increase. You won't feel much like celebrating this Christmas if all your gifts were stolen and your insurer refused to replace them. So if you don't choose a policy with unlimited cover, make sure you go with an insurer that will automatically increase your level of cover over the seasonal holidays.
4. No claims discount. If you have a no claims history, look for an insurer that will offer you a no claims discount.
How To Cut Costs
1. Make your property safer. According to Tesco Personal Finance, fitting a burglar alarm will reduce your premium by around 7.5%, linking the alarm up to the police network will shave off a further 5% and fitting your windows and doors with high quality locks will also cut your premiums by approximately 5%.
2. Purchase both buildings and contents insurance from the same provider. Insurers such as Halifax and Esure.com will discount your premium if you take out both cover types from them. Also, look out for discounts for holding several policies with the same insurer (for example, Halifax will give you a discount if you take out travel insurance as well as home insurance).
3. Opt for a higher voluntary excess. This will reduce your yearly premiums, but do bear in mind however that you will have to pay out more should you have to make a claim.
4. Purchase your policy on the internet. Providers often discount their internet quotations as there are less administrative costs through this channel.
As for me, in case you were wondering, my story does have a happy ending. My father -- a great believer in insuring everything -- had taken out both buildings and contents insurance, and the insurer covered the costs of putting everything back the way it was.
So it all worked out fine for them in the end, although, thank goodness, Mum didn't bother to replace the chip pan. She bought a fire blanket and a fire extinguisher instead...
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