My four step home insurance plan shows you how to save £100s on your policy in no time at all. The trick to cutting your costs is to combine comparison sites in the pcorrect order and increase your number of quotes in the shortest time possible.
These savings can be had anytime. Provided you haven't claimed, most home insurers allow policies to be cancelled with a refund, and while a few charge penalties, you’re still likely to save more than their cost.
Ten Second Summary
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Lower your risk category Read Step 1 |
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Combine comparison sites for the best search with Confused*, MSP*, CompareTM* and GoCompare* Read Step 2 |
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Get cashback and haggle Read Step 3 |
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Remember next year Read Step 4 |
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 interest rates are hideous. So either pay it off in full, or if you can’t afford it in one go 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
Enter your details in a screenscraping website and they’re zipped to hosts of insurers' and brokers' websites, literally 'scraping their data off the screens', to find the cheapest. Yet, due to their commercial relationships each site covers different insurers and brokers. However by using the correct combination of sites in the right order you can cover over 50 brokers and insurers at speed.
Below you’ll see the correct order, designed so that stop early and you’ve still had the best search available in that time. It’s assessed on the number of brokers and insurers added, the time taken, feedback on the service and ease-of-use. Do use as many as possible, after all you’ve got your paperwork out anyway; and if you’re a web-whizz simply do them consecutively in separate windows to speed it up.
Compare in the following order:
This is an accurate service but as a result requires you to fill in many more details, so do ensure you've all your documents close by.
Link: Confused*
Brokers Searched
17
Insurers Searched
15
3 mins
Adding MSP to Confused gives an additional 15% of the full combined search...Total so far 75%
This search is quick but the speed is aided by making some assumptions, which can mean if you've slightly off-norm circumstances the quotes are a little less accurate. It’s second in the list, although it adds slightly less providers to its search than CompareTheMarket, as it adds brokers into the mix, increasing your market coverage further.
Link: MoneySupermarket*
Brokers Searched
13
Insurers Searched
14
Additional Benefit
3
more brokers
5
more insurers
6 mins
Adding CompareTM to those above gives an additional 21% of the full combined search...
Total so far 96%
Compare the market is an extended web broker that includes a number of insurers the others miss, and is thus very strong at filling the gaps
Link: CompareTheMarket*
Brokers Searched
0
Insurers Searched
19
Additional Benefit
0
more brokers
10
more insurers
5 mins
Adding GoCompare to those above gives an additional 4% of the full combined search...
Total so far 100%
GoCompare has expanded in the last year and now includes home insurance amongst its services. It currently doesn’t give quotes for renters so only check it if you are a home owner or in housing association accommodation.
Link: GoCompare*
Brokers Searched
8
Insurers Searched
1
Additional Benefit
2
more brokers
0
more insurers
While this isn't every insurer, it's certainly a good proportion. For total belt and braces, you could also check the two big insurers these miss, Direct Line* and Admiral.
Do be aware comparison sites send your details to insurers to get quotes, so there's a slight chance you may get sales calls or emails later.
Once you’ve found the cheapest from the screenscrapers; there are two important checks to make:
First, 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. Next, double check the policy is suitable for you, so if you want “free car hire” if your car is being fixed, 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).
What's the difference between screenscrapers and brokers?
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.
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.
Check for special offers
Some special deals might not be mentioned by comparison services. So once you’ve used the comparisons above, check them out; currently they include:
- Barclays. Barclays says it will give £50 cashback if you buy a joint buildings and contents policy online.
- Birmingham Midshires. Birmingham Midshires is offering £75 cashback if it can't beat your renewal quote for combined contents and building cover.
- Churchill. Churchill* guarantees to beat your renewal by £30 if your quote, on an equivalent basis to your renewal, is at least £75.
- Post Office. The Post Office* is offering new customers £50 cashback for taking out its contents and building insurance (£25 for each) before the 30 June 08.
Any new top deals will be in the weekly MoneySaving Email
Get cashback on top
Once you’ve found the cheapest insurer, there’s a sneaky way to get possibly £30 to £50 cashback on top… simply sign via a cashback website. 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 the advertising 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. Full details including what sites to use are in the Top Cashback Sites article.
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 (it's designed for 0% credit card end dates, but works just as well for insurance).
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.
Updates to Home Insurance will be in The Free Weekly MoneyTips Email
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