By Stefan Mustieles
Many of us are looking for ways to shave off a few vital pounds (or dollars) from our monthly bills, without sacrificing on quality. This is particularly the case with recurring expenses such as buildings insurance and contents cover.
Buildings insurance covers the fabric of your home. If, for example, a tree fell and crashed through your roof, you would claim on this policy to pay for repairs.
Contents insurance, as the name suggests, covers you against damage or theft of items within your home, such as furniture, white goods, electronic devices, clothes. It can also cover things outside of the home, in the garden or shed, or even items that you might have with you when away from your property.
Don’t Cut Corners
Being economical with costs and avoiding over-spending is a smart move. Cutting corners with insurance products, however, is not. With buildings insurance in particular, the security of your primary asset – your home – is secured.
There are still cases every year of homes that have been damaged or destroyed in tragic accidents and the stress for the family involved is compounded as they hadn’t kept up their insurance policy payments, allowed it to lapse or failed to take out buildings insurance.
If the home is owned outright, the owners will have lost their asset. If it was mortgaged, the owners will still owe the lender without the asset as security.
Firstly, buy the right insurance policy for your family’s needs. This means reading the small print and being honest when deciding how much to insure, under what circumstances and whether additional services such as legal advice and accidental damage are worth covering.
Often their cost is justified by the peace of mind their cover would provide. This is particularly the case with legal-services cover, which often just costs a few extra pounds a year but can provide substantial cover for expensive legal services in the event they are needed.
Get the Best Quotes
Head online to get the best quotes for your home insurance. Usually combined contents and buildings insurance policies are the best value when compared to purchasing both separately.
Use a price-comparison website to input your details and see which insurers will offer you the cheapest policies. But don’t simply chase the lowest price possible at the expense of cover.
Experiment with different excess amounts. Often the effect of increasing the amount of excess (deductable) you’d be prepared to pay won’t actually save you that much on the policy. Would you really prefer to have to pay a £500 excess rather than £200 in the event of a claim, just to shave a few pounds off your monthly premium? But you need to test it and decide for yourself if it is worth the savings.
Another way to save money on the policy is by paying for it annually upfront, rather than opting for monthly repayments. This is because the monthly payments cost more and effectively the lender is providing you with a credit facility. So add up all the payments for the year and compare it to the Annual rate or even the semi-annual rate.
An Alternative to Annual Rates
It may be better to take out a zero-per-cent credit card and spread the cost of the policy over the year (if you qualify and you can remain disciplined with credit cards), rather than pay an interest rate to the insurance company.
You can also use cashback credit cards which offer a small percentage back on your purchases, but don’t make the mistake of opting for a more expensive credit card because of an incentive. If you can pay upfront, then so much the better. You have the security of your policy in place and the knowledge that it’s paid for.
Other ways to save money on your buildings insurance include using a cashback website. With these sites you simply register and then click through the promotional links to do your online shopping or service purchases as usual. There are often links to insurance providers or comparison sites, so you can obtain an additional promotional cashback sum on your purchase.
Another route to consider is asking your employer if they offer any incentives through their employee-benefits packages. Or consider other groups you might be a member of, such as trade unions, membership organizations or even a church or community group. Often such organizations can arrange cheaper cover for their members as part of group-buying discounts.
Just remember not to be swayed by incentives, gimmicks and price reductions unless you’re satisfied that the cover you’re purchasing is right for your insurance needs.
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