Let’s start with the basics. Your insurance premiums are the regular payments you make to your insurer, for your cover.
Your insurer works out how much you pay, based on how much of a risk you are to them – or in other words, how likely you are to make a claim.
If your insurer thinks you’re more likely to make a claim than the average person, then you’ll be charged a higher premium. If they think you’re less likely to make a claim than the average person, you’ll be charged a lower premium.
So how do you make sure you fall into the right category? We’ve put together a few tips to help you keep your different insurance premiums as low as possible.
Improving home security
The more secure your home is, the less likely you are to be burgled. Many insurers recognise this reduction in risk, and so offer lower premiums to those people with more secure homes.
That means effective door and window locks, burglar alarms and other security devices don’t just keep your home safe: they could also cut the chance of an insurance claim, which could in turn cut the cost of your premiums.
Some policies specify their preferred types of lock, or even demand a certain degree of security as a condition of cover, so make sure you check the small print.
Streamlining your cover
Policies vary substantially from insurer to insurer. If you’re thinking of taking (or already hold) add-on policies such as home emergency, personal possessions or accidental damage cover, it’s worth checking and double-checking that you’re not already covered by your buildings or contents insurance.
And when it comes to buildings insurance in particular, it’s worth checking you’ve got the right amount of cover. Rather than basing the amount on the market value of your home, look at the rebuild value. That’s the cost of rebuilding your home from the ground up (and alternative accommodation in the meantime) and it’s often a lower figure.
Finally, if you’ve got kids at university, and you’re paying for additional insurance for them, check own policy. They might be covered by your home insurance.
Building up your no-claims
Insurers reward customers who don’t make claims. If you don’t make a claim for a set period of time, that will be reflected in your premiums, in the form of a no-claims bonus, or NCB.
NCBs can save you a significant amount of money, so if you’re thinking of making a minor claim, for a relatively low amount, make sure you compare the potential pay-out with the potential benefits of your bonus. It might make more sense to cover the immediate cost yourself, and preserve your NCB. You’ll find all the details in your policy document.
Increasing your excess
When you take out your policy, you’ll usually have the option of paying a voluntary excess (on top of a compulsory one). This is the amount of money that you’ll pay towards the cost of any claim.
If you set a higher excess, that’s likely to be reflected in the cost of your premiums (as you’ll be reducing the potential pay-out from your insurer).
If you’re thinking of taking a combined buildings and contents policy, check the small print. Some insurers have a separate excess for both elements, which means the costs can add up – especially in the case of a claim that falls into both categories.
Upgrading your tech
Looking to the future, as the Internet of Things continues to develop, and our homes and appliances get smarter and more connected, there are likely to be big implications for insurance – and potentially big savings for customers.
Insurers are already exploring the idea of fully personalised policies that recognise and reward the savings, improvements and efficiencies offered by smarter household technology.
If you don’t already have buildings and contents insurance you can get a quick and easy quote from us here. British Gas offer Defaqto 5 star rated insurance for your home, garden and other stuff you love. Our UK based help team are open 24/7 to support you whenever you need it. Get a quote in less than 2 mins.