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
• Current special deals
• Step 4: Remember next year
• The Current Record - £67 PROFIT
• 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

Beware 'pay monthly' options - usually the insurer actually just loans you the annual cost and then charges interest at hideous rates on top. So either pay for it in full, or if you can't afford it, use a credit card with a lower APR rate (or better a 0% credit card for spending ensuring your repayments are big enough to clear it within a year).

What to cover?

A common mistake is to cover the house's market value (the amount it could be sold for), meaning many people are over insured and paying way too much.

Actually, the amount you cover (again called the 'sum insured') should be the 'rebuild value'; simply the cost of rebuilding the property if it were knocked down. Therefore location is less important than the value of materials, labour and architects' fees. However it's important that any building policy covers the cost of an alternative residence for you if your home were being rebuilt.

Commissioning a survey is the most reliable method to establish the rebuild value, but will be expensive unless you're getting one anyway when buying a new home. A less accurate, but quicker, option is ABI's calculator, using one of the comparison websites that incorporate the ABI's data - our top pick below Gocompare* does this - or simply asking an insurer to give you a rough value based on standard assumptions.

Step 2: Correctly combine comparison sites

Comparison sites zip your details to hosts of insurers' and brokers' websites, scraping their data off the screens to report back the cheapest. So be aware they often feed your personal details to insurers (see What insurers may do).

Yet these screenscrapers don't all compare the same sites, so the best strategy's to combine them. We've analysed to produce an order that gets you the max. quotes in the min. time (see How the order is picked).

Compare in the following order:

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. (see What to check).

• Examine the policy's coverage.
  
  Check whether it's suitable. 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.

Individual insurers are like bakers, your choice is simply to buy its cheapest loaf that suits. Brokers are like supermarkets; they stock a range of bakers' loaves and the price charged depends on their relationships with suppliers. Screenscrapers are like sending someone round supermarkets and bakers to note all their prices.

What if my insurer goes bust?

Insurance providers are covered by the government-backed Financial Services Compensation Scheme (FSCS) the same as banks, meaning if they go into default, you're protected

In the unlikely event it happened, the FSCS will try and find another provider to take over or issue a substitute policy. However, if you've ongoing claims, or need to claim before a new insurer is found, the FSCS should ensure these are covered. For more see 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.



• 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 Hidden Cashback and Haggle

By now you'll know the cheapest available provider, yet you may be able to cut the cost even further.

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.

The step-by-step list below takes you through a variety of options to improve your deal.

• Step 1: Check cashback websites
  

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

  Yet be warned, until it's in your bank account, this cashback is never 100% guaranteed, and getting the right policy is always paramount. Therefore never simply try and choose based only on cashback, see it as an potential added bonus once you've picked the right cover.

  Those new to cashback sites, should ensure they read the Top Cashback Sites guide for pros and cons before using them. Otherwise use the Cashback Sites Maximiser tool to find the highest payer for each insurer.

  Though beware if you've used comparison sites first, the cashback site may not track unless you clear your computer's cookies. Further information on deleting or controlling cookies is available at AboutCookies.

• Step 2: Get £10 cashback via comparison sites

  If cashback sites don't list your insurer then BeatThatQuote* pays £10 cashback for polices purchased via its site.

• Step 3: 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 (listed alphabetically):

  Aviva. Buy Aviva* home insurance online and get a discount of up to 20%, plus new customers with at least three years no claims can get free contents cover, up to £55,000, when buying buildings cover.

  Barclays. Barclays* is offering new customers 12 months for 9, plus 25% off online. Quotes are valid for 90 days.

  Beatthatquote, via Argos: Argos (which uses the Beatthatquote comparison) is giving a £15 giftcard for buying insurance via its site.

  Churchill. Churchill is offering 50% off home insurance cover until 31 Dec 2010, if you haven't claimed in the last 5 years. Quotes are valid for 90 days.

  Confused: Buy via the Confused partner site on Nectar and you'll get 1000 points (worth £5).

  Direct Line. New customers buying online can get '12 months for the price of 9' plus up to 25% off on contents and/or buildings insurance from Direct Line* until 30 Sep 2010 - a total maximum discount of 44%. 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. Also, make sure you remember to check if next years discounted renewal price can be beaten before automatially continuing with the policy.

  HSBC. HSBC* has a '12 months for the price of 10' offer for new customers taking buildings and/or contents cover until 5 Sep 2010. There's a minimum premium (before the discount) of £47.25 for a buildings or contents policy and £94.50 for a combined policy before the offer can be taken. Quotes valid for 90 days.

  Lloyds. Lloyds* is offering new customers £50 Cashback when buying combined buildings and contents 'options' insurance online. Get the 'solutions' cover (only by phone or in branch) and you'll get 50% off contents insurance when buying a combined 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 100 days free cover plus an extra 20 days when you buy online (equal to 33%) for new customers buying both buildings and contents insurance (excluding Home Emergency or Legal Assistance Cover) before 5 Sep 2010.

  Natwest. Natwest* is offering 20% off joint buildings & contents insurance, with an extra 10% off online when you enter the code '10percentdisc' on the 'Your Details' page - a total 28% discount.

  Sainsburys. New customers get a £50 shopping voucher and 15% off when buying combined buildings and contents insurance (exluding landlord cover) from Sainsbury* until 5 July 2010. You must be a Nectar card holder to get the shopping voucher.

  Swinton. New customers can get £30 cashback when buying home insurance from Swinton* before 1 Dec 2010 when entering the code HMWTDR648.

  Tesco. New customers who buy buildings and contents cover from Tesco* before 15 Sep 2010 will get 50% off the cost of the contents part of their policy.

  TescoCompare: Buy your home insurance via TescoCompare and you'll get a free lost key recovery service for 1 year (RRP £9.99). Read the terms and conditions.

Haggle

The home insurance market is very competitive and companies are desperate to retain business. Therefore once you've got your overall cheapest price get on the phone and try to haggle. There's often massive price flexibility, but be fully armed with the screenscraper's cheapest quotes and any available cashback 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. For more haggling hints and tips read the full Haggle On The High Street guide.

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.

Get paid to be a mystery shopper

You could also sign up to Consumer Intelligence, a consumer research company, who pays several hundred people a month near renewal, up to £50 to carry out comparisons and importantly you do not need to buy insurance from any of the companies you've contacted. See the It's a Mystery forum thread for full details.

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.

The Record... PAID £67.50 for a year's cover

• 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.

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.