Household insurance is a necessity: you can’t even buy a house without it in most places! What kind and how much house insurance you buy has a big impact on your wallet, both now and in the event you need to make a claim. What can you do to save yourself money? Get informed!
The two kinds of house insurance
You will need to purchase two insurance policies, one for your house, and a separate policy to covers its contents. These are generally two separate policies. The policy that covers your house may also cover any other outbuildings on your property. The policy that covers your household possessions will not generally cover possessions that are not permanently kept in your house, such as jewelry and laptops. You may need to purchase a third policy to cover your ‘mobile’ possessions.
Insuring your home and outbuildings
The steps you take to reduce your expenses for home insurance are different from those to insure your household contents. Many banks that give out home loans also specify which insurance company you must use. This can be a good thing, if they want you to use some insurance company because it is reliable and reputable. Or it can be a bad thing. There is always the possibility that they just have a deal with the insurance company, which doesn’t spell out savings for you in any way. To protect yourself, shop around for both lenders and insurance companies. That way you’ll have a good idea of how much coverage should cost.
Once you settle on a good insurance company, you may want to consider using them for all of your insurance needs. Chances are you can get better rates if you use them for multiple types of coverage. They will want to get your business, and it will save you some bookkeeping if you keep all you policies under one roof.
The amount of insurance you purchase to protect your new home is determined by its value at the time of purchase. As time goes by, your house will probably increase in value. Make sure your coverage increases too. It is false economy to under-insure your home, especially while you are still paying off the loan!
One good way to save money on your policy by setting the excess you pay under the policy to the highest you can afford. The excess is the amount you pay if you have to make a claim. The insurance company pays for claims above the excess up to the maximum coverage. So the higher the excess you decide you can afford in the event of a claim, the lower your premiums are going to be.
Insuring your household possessions
There are a couple of things you can do to save money on your household contents insurance. First off, don’t over-insure. This is a common mistake people make. You can’t claim for items you don’t have, so you will just throw money down the drain every month. Take stock of your possessions and insure accordingly. Some companies require security devices before they will even insure you. Others will decrease your premium if you install additional security devices. It’s a good idea to have a look at the cost breakdown of purchasing and installing these devices. You insurance company can give you an idea of how much you can save on your policy.
Once you have a look at your policy, you may find even more ways to save, by cutting down on some types of coverage that are not necessary, and increasing your excess. Saving on insurance is a matter staying informed, and keeping your coverage up to date and appropriate to your lifestyle.
