We show you how to stay protected - but pay up to 50% less for your cover.
If your household budget is tight, you may be tempted to cancel an insurance policy, or not renew it when cover comes to an end.
However, cancelling home insurance or going without travel insurance could prove to be a disastrous false economy. If the worst happens, it might mean you face a bill of several thousand pounds - with no hope of paying it.
A much more sensible approach is to whittle down the cost of the cover you already have. Here are ten simple steps you can take to slash your premiums by as much as 50%.
1. Don’t pay for double cover
Make sure you’re not paying twice for the same cover.
For example, your home insurance policy may include a ‘personal possessions’ element that covers your mobile phone (when out and about) and your luggage (when on holiday).
If that’s the case, you can ditch pricy phone insurance (which is usually a rip-off anyway) and remove the ‘luggage’ element from any travel cover you buy.
2. Don’t let a retailer sell you a warranty
Your home insurance may also provide much the same cover as the expensive extended warranty a retailer tries to flog you - usually alongside an electrical product.
And even if the warranty does provide additional protection, those sold alongside high street items are usually hideously over-priced.
If you decide you really do need an extended warranty, you’ll get more for your money by going to a stand-alone provider like Warranty Direct.
3. Pay upfront
When you buy a ‘big-ticket’ insurance policy (typically car, home or boiler insurance) the provider will probably suggest you pay a certain amount every month.
However, don’t be sucked in: If you choose to pay in monthly instalments, you’ll be charged a hefty rate of interest for the privilege.
So, it’s cheaper to pay the full amount upfront if you can possibly afford it. And if you don’t have that sort of cash, consider using a 0% purchase credit card to pay in full. Just make sure you clear the balance before that 0% period ends.
4. Raise your excess
The higher the excess you’re willing to pay, the lower your overall premium is likely to be.
Just make sure you able to find that cash in the event you do need to make a claim!
5. Improve home security
Improving your home security could significantly reduce your home insurance premiums. For example, having a burglar alarm linked to a police station could reduce your costs by 10% or even more.
And of course, it also makes it less likely that you’ll be broken into in the first place!
6. Opt for basic protection
In certain circumstances, it might make sense to bring down a premium by reducing your level of cover.
For example, if your car isn’t worth much, you could cut costs by shifting from comprehensive cover to third party, fire and theft.
However, it’s crucial you read all the new terms and conditions that apply to you, and fully understand the implications of the downshift.
In the case of car insurance, it means that your car will no longer be protected if it’s damaged by anything other than fire or theft. And neither you nor your car is covered if you have an accident that’s your fault.
7. Keep it simple
On the subject of car cover, resist the urge to ‘pimp your ride’ with a souped-up spoiler, flash alloys or a weirdly large exhaust.
Once a car is modified, it’s likely to cost significantly more to insure.
8. Check what’s already covered
Here at lovemoney.com, we usually recommend that you get specific extra travel cover if you plan to take part in extreme sports or other risky occupations.
That’s because activities of this sort are typically excluded from standard cover.
However, once you’ve chosen a travel insurance policy, do check exactly what is covered as ‘standard’.
When booking John Lewis travel insurance last week, I was delighted to find that all sorts of sports fell into the standard category - including water skiing, surfing and even (organised) go-karting. So, no need to pay extra!
9. Shop around
The single most important thing you can do to save money on insurance is shop around. New customers are almost always given lower quotes than existing customers - for the exact same cover.
So, don’t ignore that ‘do nothing and we’ll renew automatically’ letter when it comes in the post. Instead, use an online comparison service to research the competition and get quotes from rival insurers.
10. Don’t be afraid to haggle
Finally, once you’ve unearthed the best deal on the market, go back to your existing insurer and see if they’ll beat it. I know haggling isn’t terribly ‘British’, but it’s well worth playing providers at their own game.
When my home insurance policy came to end a couple of months ago, this is the strategy I employed. In the end, my existing insurer agreed to beat the rival quote I’d found - so I didn’t even have to go through the hassle of switching providers.
More: 25 ways to cut your car insurance | Halve the cost of your home insurance