Don't let the cost of building insurance crack your budget


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The Independent Online

With the expectation of another harsh winter, the cost of buildings insurance premiums have shot up. In the past 12 months the average cost of buildings cover has rocketed 14.3 per cent according to the AA Insurance Premium Index.

"We've gone through two severe winters that caused widespread property damage throughout the UK. Insurers are concerned about more frequent severe weather, such as flash floods," says Simon Douglas, the director of AA Insurance.

Insurer esure is putting these price rises down to an increase in fraud. Asia Yasir, from esure, says: "The impact that insurance fraud and the rising claims culture is having on premiums is clearly visible."

But for those who want to reduce the cost of their buildings insurance, there are several options.

On top of the excess you have to pay on any claim – this can be up to a £1,000 on some building policies in cases of subsidence – you can opt to pay a voluntary excess as well. "See how much voluntary excess you can pay; added on to the compulsory excess it will help to reduce your premiums," says Julie Fisher, head of home insurance at Moneysupermarket. "Do remember though that both excesses will be added together in the case of a claim so you must be able to cover the cost of both."

We've all heard of no-claims discounts on car insurance, but you can also get no-claims policies with some buildings insurance. It works in much the same way – the fewer claims you make, the higher your discount. Ms Fisher advises: "Always consider whether or not you need to claim. If it's just for a minor issue you could cover yourself, then it might end up being more expensive if you claim."

However, although a no-claims discount might be an added bonus, sticking with what you know might not be entirely beneficial.

Ms Fisher says: "In our view loyalty doesn't pay. There are some great prices in the market so when it comes to renewing it, shop around before you do.

"You can make an average saving of £100 if you switch. If you've been renewing your policy for years you're likely to save even more."

Find a provider who will combine both of your building and contents policies, which could save you quite a bit of cash. "Buy your building and contents insurance together," says Carmel McCarthy from insurer More Than. "This can often work out cheaper in the long run."

As for contents insurance – the cost of which has risen by more than 5 per cent in the past year, according to the AA – there are other ways to lower premiums.

"Take extra security measures such as fitting an alarm, a safe or putting extra security locks on doors and windows," said Ms McCarthy.

"Insurance companies will look favourably on people who take extra safety measures in their homes."

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