Get the best deal on your home insurance
Though it is not currently a legal requirement in the UK, the majority of mortgage providers will insist on a home insurance policy being in place when you buy a property. And unless you are in the enviable position of being financially able to rebuild and refurnish your house should the worst happen, it is essential that you're covered.
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What and how much cover?
There are two types of home insurance - buildings and contents. The former covers the bricks and mortar of your home as well as permanent fixtures and fittings and your insurance policy can protect you against common problems such as fire, storm damage, subsidence and floods, as well as more unusual cover.
Contents insurance covers your belongings within the home, allowing you to replace each item in the event that they are destroyed by fire, flood or burglary, for example.
When considering your buildings insurance, the cover should be at least equal to the cost of rebuilding your home. Your mortgage paperwork should provide an estimated cost and this is what you should base your buildings cover on.
Contents, as you might imagine, can be as much or as little as you like. Essentially, it should be based on how much it would cost to replace all of your belongings if they were damaged or stolen. Most insurance providers impose a single item limit (eg. £1,000) so if you have any particularly valuable items in the house, be sure to take out an additional policy to cover them.
When it comes to home insurance, there are plenty of extras that you may want to consider. Accidental damage, for instance, is available on both buildings and contents policies and will cover you in the event that you damage something unintentionally. Some insurers will include accidental damage as standard but it is worth paying extra if not, so do check.
Other possible additions include alternative accommodation cover (which will provide you with somewhere to stay if your home is declared uninhabitable), garden cover, home emergency cover (which covers you for the cost of calling out tradesmen for essential repairs) and outbuildings cover.
Specialist insurance policies may be required for holiday homes (basic policies will usually insist that your property is not empty for longer than 30 days at a time) and landlords.
How to get the best deal?
Given the current economic climate, most of us are searching for ways to save money and reducing insurance premiums is a common way of cutting our household bills, but don't be tempted to tell porkies in a bid to slash your monthly payments - cutting out essential policy items will mean you are not covered in the event of damage and you could end up with a sizeable bill to pay.
You may, however, decide that you don't need accidental cover and this could cut your premium by as much as 25 per cent.
Of course, there are ways in which it is possible to reduce your premium. Ensuring that your home is secure is one such option - a good home security system (with alarm) will help, as will security lighting.
Similarly, a smoke alarm is essential as it will not only keep you and your family safe, but provide your insurance provider with that extra assurance. Some insurers ask whether you are a smoker and this added fire risk can increase your premium.
Your mortgage provider will often try to sell you their own policy but you may find that it's not the cheapest option.
As always, it pays to use an online comparison site for a quick glance at the cheapest deals but it is also worth checking the cost of separate buildings and contents insurance - combined quotes might seem easier but you could save money by taking out separate policies.
Do be sure to check the excess too - obviously the amount of voluntary excess you are prepared to pay will reduce your premium but you should be able to pay this comfortably so make sure you are happy to stump up in the event of damage.
And lastly, if you can afford to pay your home insurance in one lump sum, you could save quite a bit - spread the cost with a direct debit and you are likely to be charged for the privilege, so if paying outright is an option, it is worth comparing the cost with and without the interest you will be charged on a monthly payment plan.
