Beware insurers bearing gifts – the best deals may still be elsewhere
Pens, vouchers, radios – whatever they offer, shop around.
Sunday 04 October 2009
Homeowners are being bombarded with insurance offers on what can seem like a weekly basis. In fact, finding a home-insurance policy without some kind of freebie or discount attached is difficult. While at face value this trend may seem positive, are these offers really that good?
"There is a lot of competition in the home-insurance market and insurers are constantly trying to lure customers in with discount deals and even free gifts if you join them, but don't be taken in," says Jasmine Birtles, founder of financial website Moneymagpie.com.
Notably, both Direct Line and Aviva, the only insurers to have resisted listing on comparison sites, offer some of the most impressive discounts. Last week, Direct Line launched a deal offering new customers one-third off home insurance when they buy buildings and contents policies together. This apes an offer from insurance giant Aviva – up to £55,000 worth of contents cover free with a new building insurance policy.
But we carried out a mystery shop, based on a single male, in a semi worth £134,000, with £30,000 worth of contents, and found that Sheilas' Wheels and esure offer cheaper premiums for a combined building and contents policy. Quotes for Direct Line and Aviva were for £149.10 and £134 respectively, while Sheilas' Wheels offered £116.82 and esure £116.40. So, just because something comes free doesn't mean you shouldn't shop around.
"It's always difficult to tell if consumers really are getting money off the premium or if the premium is priced above the market average in the first place," says Mark Monteiro, an insurance expert at uSwitch.com.
A discount is only as good as the price on which it is based, and homeowners should be comparing quotes, not discounts. With this in mind, what steps can be taken to ensure finding the best possible price?
Generally, combined policies are cheaper than two separate policies for contents and building cover. But there are some instances when splitting the policies up is the better option – if, say, you have never claimed on a building policy but have claimed heavily on contents. Also, those with a high proportion of risky items such as jewellery, but living in a low-risk property, may reduce premiums by splitting.
"But don't forget to weigh up potential savings with the fact that in the event of a claim it's normally much easier for the customer to deal with one insurer than trying to co-ordinate two," says Darren Black, the head of home insurance at price comparison site Confused.com.
Extra charges for those paying by direct debit are another pitfall. Some insurers charge interest on installment payments, so try paying upfront for the whole year.
Special offers aside, one of the easiest ways to reduce premiums is to increase the excess. Increasing a compulsory excess of £50 to, say, £200 should reduce premiums considerably. Opting for indemnity cover instead of "new-for-old"cover will usually cut costs too, as your belongings are insured for the current value, taking into account wear and tear. This is risky, however, in the event of a major burglary or serious damage.
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 3 Lego breaks out of the toy box and heads for the gallery
- 4 Julian Assange and Edward Snowden join piracy mogul Kim Dotcom’s political campaign in New Zealand
- 5 Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
iJobs Money & Business
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony