Cheap Home Insurance

You can sever home insurance costs in ten minutes. The trick is to harness every web comparison service in the correct order, massively increasing the number of quotes, and then sneakily get cashback on top. This technique’s so powerful, some MoneySavers get more cashback than policy’s costs, the record is currently being PAID £67 to take out the cover!

These savings can be had anytime. Provided you haven't claimed, most insurers allow policies to be cancelled with a refund, and while a few charge penalties, you’re still likely to save more than they cost.

• Ten second summary
• Step 1: Get the correct cover
• Step 2: Best Buy Comparison sites
• Step 3: Grab cashback and haggle
• Step 4: Remember next year
• Other Articles/Discussion

House costing you money?

Ten Second Summary

Step 1: Ensure you're getting the correct cover

Insurance premiums, the name for payments made to insurance companies, depend on the insurer, the level of cover and how risky you're perceived to be. Therefore start by defining your cover and ensuring you’re as low a risk as possible.

Full information on this, including the difference between buildings and contents cover and how to lower the risk category you are in, are in the special additional extra tips to cut your home insurance premiums article.

Beware monthly payment plans

Whoever you insure with, if it gives an option to 'pay monthly’, be careful. What usually happens is the insurer actually loans you the annual cost and charges you interest for the privilege. While occasional promotions are interest free, usually the rates are hideous. So either pay it off in full, or if you can’t afford it, it's actually cheaper to pay with a 0% credit card for spending and make the same repayments to that.

Step 2: Shop around automatically

Screenscraping websites zip your details to hosts of insurers' and brokers' websites, scraping their data off the screens to report back the cheapest. Yet there are three big things to remember...

• The order maximises the search in the minimum time. Read How the order is picked
• Always double check your results. Read What to check
• Your data is being given to insurers. Read What insurers may do

Compare in the following order:

Stop Press: June 09. Direct Line's* offering 50% off contents insurance until end of Sep; as it's normally quite cheap and not included by comparison sites, for contents only it's worth checking too, but always use comparisons as well.

MSE Update May 09: Only insurance has gone into administration, while the website is still operating, we have temporarily removed it from the guide, while we watch to see what will happen.

Once you've found the cheapest

Once you’ve found the cheapest from the screenscrapers; there are two important checks to make:

• Double check the quotes.
  
  Click through to the insurance provider's own website to double check the quotes, as to speed up searches some comparison sites make a few assumptions.

• Examine the policies coverage.
  
  Is the policy suitable for you? So if you want "accidental damamge", is it included? Plus while you’re there it's worth playing with the policy details to see if you can finesse the price down; look at the excess, and the name of the policy holder (if a joint policy) as the age of each person can affect your quote (see extra tricks article). This tool by Find allows you to check the coverage of two different buildings* and contents* policies side by side.

Screenscraper and broker differences

Brokers and screenscrapers may seem like they're doing a similar job, as each search a number of different insurers; yet they're radically different beasts. My favourite analogy for this is to compare it to searching for the cheapest loaf of bread.

Each individual insurer is like a baker, so your choice is simply to buy the cheapest loaf it offers that fits your characteristics. Brokers are the equivalent to supermarkets; they stock a range of bakers' loaves and the price they charge depends on their relationship with the supplier. Yet screenscrapers are like sending someone to speed round all the supermarkets and bakers to find the cheapest loaf of all of them.

What if my insurer goes bust?

The economic times we live in mean you never know which companies may be the next to have problems. Fortunately, insurance providers are covered by the government-backed Financial Services Compensation Scheme, meaning if they go into default, you’re protected.

The main way this happens is the FSCS will try and find another provider to take over your policy, or issue a substitute policy. However, if you have any ongoing claims, or need to make a claim before a new insurer is found, the FSCS should ensure these are covered. For full details, read the Insurance section of the Savings Safety guide.

Further tricks to find a cheaper price

If the comparison sites haven't saved you money or given the cover you need there are some alternatives:

• High value possessions
  
  If you have several high value possessions Hiscox* may be worth a check.



• Only need basic cover
  
  The Personal Home Plan from Lloyds is a pick and mix policy for those with a good claims history where you only pay for the cover you need (such as garage, shed or mobility scooter cover).



• Guarantee to beat your renewal by 10%
  
  

  Uswitch* is offering to beat your home insurance renewal quote, for cover on a like for like basis, by at least 10%, providing your annual premium is over £100. If its online comparison doesn't give you a cheaper price call 0800 123 700.

Step 3: Grab Cashback and Haggle

By now you’ll know the cheapest available provider, yet you may be able to save on this price.

The top cashback deals

Once you’ve know who your cheapest provider is... then you need to check there aren’t any hidden cashback deals, these can be as high as £120. If your second or third cheapest quotes weren’t much more expensive then see if cashback is available for them too, and find the overall winner.

• Step 1: First check special cashback websites
  

  These are special sites carrying paid links from retailers and financial services providers; in other words if you click through them and get a product they get paid. However importantly, they then give you some of this cash which means you get the same product, but a cut of its revenue.

  Not all insurers are included, and you should never choose an insurer just for the cashback, but if your cheapest does pay out, why not grab it. If you’re new to cashback sites, ensure you read the Top Cashback Sites guide for pros and cons before using them, if not use the Cashback Sites Maximiser to find the highest payer for each insurer.

  One thing to remember though, if you've used several comparison sites then buy your policy via a cashback site it might not track unless you clear your computer's cookies first. Further information on deleting or controlling cookies is available at AboutCookies.

• Step 2: If all else fails check special deals
  
  

  If you can’t get cashback it’s worth noting a few companies have special deals not mentioned by comparison services. These currently include:

  The AA. The AA* has a 30% online discount for its home insurance (contents, buildings or both) and is also offering a £20 discount to those buying its home insurance when they get a no obligation car insurance quote by phone. Get a home quote online first then call up 0800 107 7290 to buy the policy and you should get this discount, although we've been told the £20 offer could be stopped at any time.

  Barclays. Barclays* is offering new customers half price contents insurance (up to the value of £50,000) until 31 Aug 09. Quotes are valid for 90 days.

  Confused: There are two offers (one only can be given per policy) for buying via Confused, although you need to get a quote via its partner sites: 1000 Nectar points (worth £5); £20 Matalan voucher for Matalan reward card holders. The Matalan card is free but you need to buy the policy in one transactions, eg not save the quote to come back later.

  Direct Line. New customers can get 50% off contents insurance from Direct Line* until 30 Sep 09. Quotes are valid for 90 days.

  Halifax. Halifax says it will give £50 now and £50 for each year you renew, if you take out its contents and buildings insurance by either phone (0800 169 9361 quoting reference TY50) or in branch. However its online price is 25% cheaper so may beat the discounted offline price. Also, make sure you remember to check if next years discounted renewal price can be beaten before automatially continuing with the policy.

  More than. More than* is giving upto £75,000 free contents cover to those buying its buildings insurance. The free contents cover continues as long as you don't make a claim so if you renew at the end of the year it remains free.

  Nationwide. Nationwide* has an offer for 25% off when you buy both buildings and contents insurace as well as 5% off when you buy online.

  Aviva. Aviva* is offering £50,000 of contents cover for free when you buy its buildings insurance and you have been claim free for both contents and buildings for 3 or more years. There is a £100 minimum excess.

  Sainsburys. New Sainbury's customers who buy combined buildings and contents cover online before 3 August 09 can get 3000 Nectar Points, worth about £15 (see the Loyalty Points guide for more info).

  Swinton. New customers can get £30 cashback when buying home insurance from Swinton* before 6 Dec 09 when entering the code HOSWDI638.

This could mean you GET PAID to take it out

This technique’s so powerful, some people get more cashback than policy’s costs, effectively meaning they were paid to take out the cover! The current record is held by MoneySaver Saving4Jesus.

• Quote of £52.50. By using the comparison services he found a quote for £52.50.

• Cashback of £120. That same insurer was paying a mammoth £120 cashback. The important thing is, the cashback tends to be fixed whether your quote is for £77 or £864 as it's all about insurer’s marking budgets not price.

• Thus he was £67.50 up. Therefore for a years home insurance he actually made £67.50.

Quite a few MoneySavers have reported being paid to get policies already, if it happens to you, or you get a mammoth deal please report super cheap deals.

Haggle

The home insurance market is very competitive and companies are desperate to retain business. Therefore the next step is to get on the phone and try to haggle (unless cashback’s available as that has to be via the net). There's often massive price flexibility, but be fully armed with the screenscraper’s cheapest quotes first.

The first port of call should be your existing insurer, after all if it can beat or even match the best quote it saves the hassle of switching policy. If that doesn’t work and you’re still in the mood, take it to a broker.

Step 4: Remember next year

Apply for cover from your existing insurer as a new customer and it’s likely you’ll be given a cheaper price. This is because home insurers like any company will happily profit from apathy if they can. It’s for this reason renewal notifications are sent as near to renewal as possible; as then you’re pressured for time and less likely to try and find a cheaper price.

To avoid being forced to decide quickly, diarise a warning six weeks before your renewal date, so there’s plenty of time to sort out a new provider. Alternatively use the free Tart Alert which sends a reminder text or email.

Using this four step solution works. For buildings & contents insurance for a 3 bedroom semi-detached house in Manchester with £40,000 worth of contents and a rebuild value of £150,000.

The standard renewal quote was £630; yet using this four step plan the cheapest found was just over £350. That's a saving of around £280, before the haggling even begins!

If you found that quick and easy

The Car Insurance cost cutting article works in exactly the same way and could save you another wedge of cash. Don't forget to check that out too.