At Mortgage Plus we now offer home insurance from a range of providers and in many cases are able to save our clients money on their existing policy.  Here we give an insight into how you could cut the cost of your home insurance without cutting down on the level of cover you need.

When money is tight, scrimping on insurance cover might be tempting, but there are ways to slash the cost of your premium while still protecting your home and its contents.

When looking for ways to trim the budget, cutting back on insurance cover might seem a tempting, even sensible, thing to do as long as the aim is to make sure you are not over-insured. But home insurance is one product that no homeowner ought to be without; nor should you try and skimp on cover. There are ways to cut the cost of your premium without compromising your cover.  

Review your rebuilding costs

Recent figures from the Central Statistics Office showed that home insurers hiked premiums by 25pc over the past year, at a time when the cost of rebuilding damaged houses fell by 5pc.The Society of Chartered Surveyors (SCS) produces an annual guide to house rebuilding costs. The 2009 version, published in April, shows that rebuilding costs fell by an average of between 4pc and 5pc across the country.

The rebuilding cost for a four-bedroom semi-detached house in Co Dublin, according to the SCS, is now €264,164. This cost of rebuilding the same house in 2008 would have been €276,067.

However, you should be aware that most — but not all — insurance companies will automatically increase the amount of your buildings and contents cover when they renew your policy each year. This practice is called “index-linking”.

They say they do this in order to prevent you from being under-insured

So if your insurer is still increasing your cover at renewal, ask them to reduce the amount of cover you have in line with the SCS guide.

Review contents cover too

Contents cover can shoot up too if your policy is index linked, so make sure this has not been overestimated.
It is probably worth doing a quick inventory to see how much it would actually cost you to replace everything in your home, including flooring, white goods, wardrobes and sanitary ware in bathrooms.

You should also ask yourself if you need “all-risks” cover.
All-risks cover protects against loss or theft of or accidental damage to your personal valuables, such as jewellery or money, outside your home as well as inside.
Of course, this means you will pay more to have it included on your policy.
However, you may be insured for the same loss under other policies, such as travel insurance, so check before you tick that box.

Shop around

Home insurance is not compulsory, but if you have a mortgage then your lender may insist on you securing buildings cover on your home as a condition of the loan, as they see it as a way to safeguard their investment in the event of it being destroyed or severely damaged.

But remember that you don’t have to buy it from the bank who your mortgage is with, even though it may seem convenient, as the chances are their premiums will be among the more expensive. So take the time to get a range of quotes from a broker.

 
Increasing your excess

It’s usually the case that if you make a claim on a house insurance policy, you will have to pay a certain amount yourself, which is known as the “excess”.
The excess you pay will depend on the insurer, but it is usually anywhere up to €300, sometimes more.
But if you agree to a higher excess, such as €500 or €1,000, then you can substantially reduce your premium.
While this seems like a straightforward way of reducing your premium, it might end up costing you more in the long run.

Dos and don’ts to bear in mind

Fit extra security. Fitting smoke and burglar alarms can reduce your premium. Some companies will offer a 10pc discount if you have an “approved” burglar alarm.

Other discounts are offered if you have approved security locks and a smoke alarm and if you are a member of your neighbourhood watch or community alert programme.

 
Check charges for paying in installments

Some insurers charge interest of up to 24pc for allowing people to pay their premiums in monthly instalments.

Tell the truth

If you’re not sure if your burglar alarm meets your insurer’s approved standards, or any other questions about the security that puzzle you, it’s tempting to tick ‘yes’ anyway, but doing this could make your cover worthless.

List valuable items separately

Most home insurance policies will have a single-item limit, usually between €1,500 and €2,000. So if you have a painting worth €3,000 that was stolen but was not listed separately as a valuable item, you’d probably only get €2,000 back.