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Cheap Home Insurance

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Tony and Rebecca | Edited by Johanna

Updated October 2017

home insurance illustration

Home insurance costs have continued to rise this year. Buildings insurance is already up 6.8% while our latest Bills Tracker index shows contents insurance is up 4.4%. Stay ahead of the game and play the key tricks – for starters, never simply auto-renew.

This is a full step-by-step guide to slashing the cost of home cover, for contents insurance and buildings insurance. It takes you through how to ensure you've got the right home insurance cover, what to get and how to get the best possible deal.

Rather watch than read?

To see Martin on how to choose home insurance in a five-min lowdown, click on this video filmed in partnership with The Telegraph in June 2014.

What is home insurance?

There are three main house insurance (or flat insurance) policies: buildings insurance, contents insurance and combined building & contents cover. Buildings insurance cover protects the structure, the fixtures and fittings in your home; while contents insurance covers your belongings.

Combined buildings & contents cover is only suitable for people who own their homes. If you rent, buildings cover should be handled by your landlord. Contents insurance, however, is your responsibility and should be considered by everyone. See our tenants contents insurance guide for more.

What is covered?

Included: What does home and contents insurance cover?

Excluded: What's often left out of cover?

Accidents: What happens if I damage my home or its contents unintentionally?

Outside the home: Will my policy cover my mobile phone and belongings away from the property?

Leaving the house unoccupied: I'm going away on holiday, am I still covered?

Big ticket items: Is there a single item limit?

Homeworkers: I'm working from home. Is my business equipment covered?

Christmas presents: Do I need extra cover for festive presents?


What happens if I make a claim?

Excesses: Do I have to pay an excess if I make a claim?

New for old: Will my old goods be replaced with new ones if I have to claim?

Adverse weather: What do I do if there's an emergency?

My possessions have been damaged. What should I do?

How do I make an insurance claim?

How do I protect my home against future flooding?


Can I get cover?

Special circumstances: I'm struggling to find cover – what can I do?

Unemployed: What if I am out of work?

Now you know the basics of home cover, follow our step-by-step guide to slashing the cost of your insurance – starting with the need-to-knows.

Home insurance need-to-knows

You may have mastered the basics of house insurance. But are you confident you can get the right cover at the right price?

  • house icon

    Homeowners need buildings insurance cover, but contents insurance is for everyone

    The type of cover you need to buy depends on whether you rent or you own your home. Homeowners and landlords usually need both buildings (in fact, it's often a condition of your mortgage agreement) and contents insurance. Those who rent typically only need tenants contents cover but the way to buy depends on your circumstances.

    If you need both building and contents insurance, buying combined insurance can be cheaper, but it's not without its pitfalls. For instance, some insurers – Co-op, Hastings and Tesco, to name a few – will have a separate excess for both parts of your policy.

    This means a claim affecting both the structure of your home and its contents, such as a flood, will result in a double deduction. But if you decide to buy two separate policies and you need to claim, there may be arguments between your two providers over who should cover what. It is rare but it is possible.

  • Don't over-cover buildings – rebuild value is what counts

    For the buildings element of house insurance, a common mistake is to cover the home's market value (the amount it might sell for), instead of the rebuild value – the cost of rebuilding the property if it was knocked down. The key is the cost of materials, labour and architects for your area. However, buildings policies should also cover the cost of somewhere for you to stay while your home's rebuilt or is uninhabitable.

    To find a rebuild value, commissioning a survey is most reliable, but it's expensive unless you're getting one anyway (eg, if you're buying a new home). A less accurate, but quicker option is the Association of British Insurers' calculator.
  • Don't under-cover contents – your claim may be cut

    For contents insurance, under-insuring could lead to you getting less than the value of your items if you need when you claim. Add up everything, including smaller items such as clothes, on a 'new-for-old' basis. (See new for old for more.)

    For example, if you insure £20,000 of possessions when you actually have £40,000, and you need to make a claim, then you'll only have 50% of your contents protected.

    Quick questions

    How do I calculate the value of my contents?

    What happens if I fail to get the correct cover?

  • Better locks pay for themselves

    house

    Don't know your five-lever mortise deadlock from your rim automatic deadlatch? Well you should, as getting the right lock on your doors could massively lower your contents premium. Insurers ask what type of lock you have, so you risk invalidating your cover if you put down the wrong type.

    Quick questions

    What are the main types of lock?

    Which lock is best?

    How do locks affect my rates?

    Help! I don't know which type of lock I have

  • Tweak your excess to lower your premium

    House insurance policies come with a compulsory excess (the amount you have to pay towards any claim – see excesses for more). If you have an excess of £100, but make a claim for damaged or stolen goods worth £400, your insurer will give you £300.

    You can also choose to pay a voluntary excess on top, which will bring the cost of your premium down. The more you pay, the lower your premium will be. You need to be realistic, though. Make sure the total excess is affordable, in case you do have to make a claim.

  • Beware monthly repayments, they're really a loan

    Pay-monthly options are essentially high-interest loans. Either pay your premium in full, or if you can't afford to, use a credit card with a low APR (or better, a 0% credit card for spending, ensuring your repayments are large enough to clear it within a year).

    Not all insurers charge the same fees. Here's what some of the big guns charge:

    The APRs of the big insurers
    Insurer APR if you pay monthly Insurer APR if you pay monthly
    CHEAPEST: First Direct 0% LV 24.9%
    CHEAPEST: M&S 0% Sainsbury's 23.3%
    Aviva 13.7% Privilege 26.2%
    Co-op 18.5% RAC 29.9%
    Asda 15.2% Hastings Direct 29.9%
    John Lewis 21.1% AXA 35.8%
    Churchill 23.6% MOST EXPENSIVE: Endsleigh 44.1%
    Correct at October 2017
  • Never auto-renew. Loyalty is expensive

    Insurers usually offer the best deals to new customers, punishing existing customers with higher rates for failing to challenge them. If your renewal's coming up, jot it in your diary.

    Insurers charge more each year, knowing inertia stops policyholders switching. And even though new rules mean insurers must now tell you the premium you paid last year in correspondence to you, don't rely on this to take action.

    Compare comparison sites and then call your insurer to see if it can match, or even beat, the best quote you find. If they can match or beat it, you're quids in.

  • Moved and renting out your old home? You'll need a new policy

    There are growing numbers of accidental landlords – those who marry and move into a partner's home and rent out their old one, for example, or who inherit a property and decide to let it out rather than sell.

    Fail to let your insurer know (and, just as important, your lender!) and any claim on the cover would be invalid since your existing home insurance policy won't be deemed valid because you've now got tenants in.

    For convenience, you can ring your existing insurer who – in most cases – will simply 'upgrade' your ordinary home insurance policy into a basic landlord policy. It takes just one phone call and there'll usually be a higher premium to pay to reflect this greater risk.

    But do this and you'll usually find your new policy won't include key landlord-specific extras such as loss-of-rent guarantee or public liability. Instead, you'll likely be better off looking for a specialist landlord policy from elsewhere that includes all the add-ons as well as basic contents and buildings cover. Ensure you get the cheapest deal by doing a landlord insurance comparison.

  • Is your child a student? Your policy might cover them too

    If you have a child studying, and living away from home, they may automatically be covered against theft or loss as part of your home insurance policy, under its 'temporarily removed from the home' section.

    Many policies have this cover (but do check yours), as long as your home is your child's main permanent address (ie, they'll return to your home when not a student). However, it only applies while the contents are in their accommodation (or indeed at your home).

    If you want cover for mobiles or laptops, or other items your child normally wears or carries away from your home, or their accommodation, you can add an 'all-risks' or 'unspecified personal possessions' section to your policy. This covers your child's belongings while they're out and about. But it typically comes at an added cost.

    Alternatively, if you prefer your child to have their own policy, see our Contents Insurance for Tenants guide.

Step 1. The top comparison sites

Now you know how home insurance works and what to watch out for, it's all about finding the best deal for you.

Comparison sites zip your details to insurers' and brokers' websites, finding the cheapest deals. So be aware they often feed your personal details to insurers. They don't all compare the same companies, so combine them.

We've analysed the comparison sites to find the cheapest results.

Be aware that comparison sites make many assumptions. When clicking to insurers, check all the info's correct and the policy's suitable. (See How the order's picked.)

Some comparison sites include 'free' gifts for every policy you take out. At CompareTheMarket.com there's a soft toy meerkat (you can choose from eight) for each new policy plus 2for1 cinema tickets (see Meerkat Movies deals for full details).

If I use a comparison site will it show up on my credit file?

Typical homes

Follow the order below if your home has more than one bedroom and its contents are worth less than £35,000. This is also for policyholders who haven't made a claim in the past five years.

No single site captures the entire market, combining a number of sites is the best way to make a really meaningful saving. Try them one by one or open all your top comparison sites (disable pop-up blocker first) to fill them in at the same time.

High-value contents (over £35,000)

Having lots of contents and expensive items in your home may make it difficult to insure. Follow the steps below to find the right cover.

Decide how much to cover your contents for

With high value contents, it's crucial not to under-insure. It may seem cheaper to err on the low side, but this could lead to insurers not paying out when you need them to. Add up everything you'd want to replace, including smaller items such as clothes.

If you insure £20,000 of possessions when you actually have £40,000, you'll at best only have half of your contents protected or, worse still, the policy could be cancelled for being underinsured. The latter will mean a hike in the future cost of insurance.

To get your magic number, walk from room to room, noting what everything would cost if bought again new. Hiscox also has an online calculator.

When you sign up, you must specify individual items worth a lot (£1,500+) – such as an engagement ring or an expensive watch – or risk them not being covered. If you're not sure, phone the insurer.

Very expensive possessions – eg, antiques, paintings – should be professionally valued. Remember their value may increase over time.

If you have several mid to high-value possessions, Hiscox* may be worth a check. Others are Home & Legacy, which provides three types of contracts, and John Lewis Specialist Home Insurance*.

  • Types of cover
    Once you've defined the cover level, make sure you're comparing the price like for like.

  • New for old
    Here, the payout should be for the original price of the items, though for clothing there's usually a wear and tear deduction.

  • Indemnity cover
    The provider only pays out the current value of your possessions. It's cheaper, but it can leave you in the lurch.

  • Add-on cover
    There are various types. 'All risks' includes property taken outside your home such as wallets or jewellery; legal cover pays for legal representation or disputes.

No single site captures the entire market, combining a number of sites is the best way to make a really meaningful saving. Try them one by one or open all your top comparison sites (disable pop-up blocker first) to fill them in at the same time.

One-bedroom homes

The more bedrooms you have, the higher the cost of insurance. If rooms in your home were originally used as bedrooms, but you've only ever had them function as studies or games rooms, then don't count them in the number of bedrooms. But never lie about a room's purpose — it's fraud and is illegal.

No single site captures the entire market, combining a number of sites is the best way to make a really meaningful saving. Try them one by one or open all your top comparison sites (disable pop-up blocker first) to fill them in at the same time.

Renting or in shared accommodation

Getting insurance for a room in a shared house or flat doesn't need to be expensive.

If you rent, your landlord's responsible for insuring the buildings, so you only need contents insurance. 

Our Cheap Contents Insurance for Tenants guide which highlights why contents insurance is essential for renters and how to get the right policy to suit you at the cheapest price. Bear in mind, insurers usually only pay out if there is a sign of forced entry – hence the importance of having the room your contents are in kept locked.

Struggling to find cover

Some groups, such as those in areas prone to flooding, subsidence or whose home is left unoccupied for long periods, can find it difficult to find cheap insurance cover as they are considered too high a risk. Those with a chequered financial past – such as bankruptcy or county court judgments – may struggle too.

In these situations, provider's Home Protect* and Intelligent Insurance* may be able to help.

If flooding is the reason why you are struggling to find insurance cover that is affordable, Flood Re has been set up as a joint government and insurance industry initiative to help.

One final option is to try speaking to a local broker (search on the British Insurance Brokers' Association website) about your individual circumstances.

Quick question

Will upping the security get me better cover?

Made past claims (in the last five years)

Combine the comparison sites in this order...

Comparison sites zip your details to insurers' and brokers' websites, finding the cheapest. So be aware they often feed your personal details to insurers. They don't all compare the same sites, so combine them. We've analysed the comparison sites to find the cheapest results.

No single site captures the entire market, combining a number of sites is the best way to make a really meaningful saving. Try them one by one or open all your top comparison sites (disable pop-up blocker first) to fill them in at the same time.

Step 2. The ones comparisons miss

For commercial reasons, some large competitive insurers aren't included by comparison sites. And even if they are listed, they sometimes don't give you access to special deals, such as these listed below.

The insurers not on comparison sites

Two of the biggest insurers on the market, Direct Line* and Aviva*, are not on comparison sites, only offering their products directly. Benchmark your cheapest comparison quotes against prices offered by these sites, which currently have the following deals on:

  • Direct Line*. Buy a new home insurance policy online and get up to 35% off. Or, if you have any other Direct Line products, get 10% off with Direct Line Together*.

  • Aviva*. Grab up to 20% off online whether you buy buildings, contents or combined buildings and contents cover.

Need short-term (monthly) buildings and/or contents cover?

If you're looking for temporary insurance cover to protect your building, contents or both on a monthly basis, big insurer Ageas has created the Ageas Elastic* policy to cater for this.

The way it works is once you have bought the policy, it continues on a monthly rolling basis, meaning it renews each month, until you stop it.

Some things you need to know:

Hot deals comparisons miss

While comparison sites offer a large chunk of the market's deals, others are only available directly from insurers or brokers. If any of the providers below are among your cheapest on comparison sites, use the links below to buy instead and take advantage of special deals.

£70 Amazon gift card with Insure4Retirement*

Insure4Retirement

Buy a new combined buildings and contents policy via this MSE Blagged Insure4Retirement* link before Wednesday 3 January and get a £70 Amazon gift card by email.

Despite the company name, you can be any age when buying this policy – it doesn't matter if you're 22 or 82. However, this offer is only available to new customers, ie, those who have never had a previous Insure4Retirement home insurance policy. The gift card will arrive about 100 days after your policy start date. We have little feedback on the company so please tell us your experiences.

Read more on how to ENSURE you get the gift card

Post Office promises to beat renewals by £50*

Post Office

The Post Office* promises to beat renewals by up to £50 for strictly like-for-like policies (eg, excess and amount covered) for new customers. Send your renewal documents to claim. It can take 60 days to complete the offer. (See T&Cs for more.)

Will it work? We've seen these deals before. Sometimes they work, sometimes they don't – there's no guarantee. Yes, the Post Office will do it but can be incredibly picky, meaning it may scrutinise your policies to make sure they're like for like. We've received feedback from users who have found this frustrating, while others say it works.

Step 3. Check your policy

Always double-check the policy terms. Once you've found the cheapest quotes from the screen scrapers, make two important checks.

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

  • Examine the policy's coverage
    Check whether it's suitable. 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 see if any tweaks can cut the cost.

Step 4. Haggle

haggle

Haggling often won't get you the market's best deal. But it can cut the cost if you don't want to switch insurer.

Once you've followed the steps above and have the best price, get on the phone and haggle. If your insurer can beat or match your best quote, it saves the hassle of switching policy. If that doesn't work and you're still in the mood, enlist the help of a broker.

For more haggling tips, read the full Haggle On The High Street guide and the Top 10 Firms To Haggle With.

Saving £700 on home/contents insurance + better cover. Always get new quote, never accept renewal offer.
@simonsanders

Sainsbury's renewal was £252. Rang Sainsbury's, talked it down to £181.
@ladygeeke

Step 5. Get cashback

Once you know which your cheapest provider is, you need to check you're not missing out on any cashback deals.

If your second or third cheapest quotes weren't much more expensive, see if cashback's available for them too, and find the overall winner.

It's important to be aware that the cashback is coming from the comparison site, not the insurer, so getting the cashback relies on its ability to pay.

Things you need to know before getting cashback...

Never count the cash as yours until it's in your bank account

Withdraw the cashback as soon as you're allowed

Clear your cookies

Step 6. More tricks for a cheap price

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

  • Get quotes up to three months before renewal
    A number of insurers will hold the price of the quotation for 90 days. So if you get a quotation two or three months before your renewal is due, you've locked in a price in case costs rise in the near future.

    Aviva*, Churchill* and Privilege* and will allow you to buy a policy up to 90 days ahead, John Lewis Insurance* is valid for up to 60 days. Remember, the quotations are subject to your details not changing. Set up a Tart Alert to remind you when it's going to expire.

  • Guarantee to beat your renewal
    Some have price guarantees if you've not beaten your renewal quote. But make sure you're getting the same level of cover, excess and add-ons as your current policy.

  • Provider to try
    The Post Office* guarantees to beat renewal quotes by at least £50 for a buildings, contents or combined policy (some conditions apply, see T&Cs).

  • Brokers and comparisons
    Broker Quoteline Direct* promises to beat your price by at least 10% with similar cover.

The record results following the system

Of course most people just want a quick cheap result. In which case following the first few steps of the guide should do that.

However if you're prepared to go all the way, a few people can really bring costs down to ridiculous levels – we've even had some people earn more cashback than their policy costs – effectively meaning they were paid to take out the cover! The current record is held by MoneySaver Saving4Jesus:

The record: £67.50 PROFIT for a year's cover

winner

In 2007, forum user Saving4Jesus recorded a profit by using a combination of our home insurance system and cashback sites to get this inspiring profit. Saving4Jesus was even able to get paid £18 in 2008 following the same process.

This is how Saving4Jesus did it.

  1. Quote of £52.50 Using some of the comparison sites, he found a quote for £52.50.

  2. Cashback £120 That same insurer was paying a mammoth £120 cashback. Cashback tends to be fixed whether your quote's for £77 or £770, as it's all about insurers' marketing budgets rather than price. For a year's home insurance, he actually made £67.50.

Will you be our 2016 champion? Current record '£23 PROFIT'

The battle is on to be our Home Insurance champion for 2016. The first entry was Matt who tweeted:

@MoneySavingExp @MartinSLewis Comparison sites in order from your site then @quidco to get £55 cashback on a £58 new policy!!

Yet that didn't last long, as soon as we told people about it, we got this email in from MoneySaver Ian:

On your recent weekly email it was stated that after cashback the home contents cheapest insurance this year was £3. Well I have paid £32.41 and I have £55.55 cashback confirmed, so I should have £23.14 profit.

Share your success stories. Let us know if you beat it.

We love to hear when you get cracking deals, should it be about your cashback, haggling or insurance saving success story. So tell us by email or report super-cheap deals via the forum‚ so we can share them with other MoneySavers.

Have you used this guide's techniques to save? If so, please tell us in the Home Insurance Super Deals forum discussion.

How to complain about your insurance provider

The insurance industry doesn't have the best customer service reputation and while a provider may be good for some, it can be hell for others. Common problems include claims either not being paid out on time or at all, unfair charges, or exclusions being hidden in the small print. It's always worth trying to call your provider first, but if not then…

Free tool if you're having a problem

man complainingThis tool helps you draft your complaint and manage it too. It's totally free, and offered by a firm called Resolver which we like so much we work with to help people get complaints justice.

If the complaint isn't resolved, Resolver will escalate it to the free Financial Ombudsman Service.

Important: if your issue is about a voucher or incentive that was part of an MSE Blagged deal, then instead just let us know by emailing voucherhelp@moneysavingexpert.com as that's usually quicker.

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