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MONEY COMMENT
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Every year around this time, I get a renewal notice from my home insurer reminding me that my annual premium for buildings and contents insurance is due. Generally, what I'll do is to leave this letter in my huge pile of "things to do" until my policy has almost expired, then I'll spring to life. Instead of automatically renewing my previous quote, I always call and ask my broker to "re-broke" the quote and get him to shop around for the best deal currently available. I then do my own desk research, checking various online comparison and company websites to see if I can beat his best offer. My broker's quote was always great value until last year, when my premium absolutely soared. When I called to find out why, I discovered that my insurer (a Lloyd's syndicate), had been taken over and ceased writing household business. Thus, I was forced to go elsewhere. One thing I don't do is to buy the cheapest policy, because I'm well aware that some insurers target those consumers who shop around by producing "budget" or "cutdown" cover, which often lacks many essentials. This is why I set a quality threshold and then buy one of the few products to meet my benchmark. Here are some pitfalls to watch out for when combing the market for home insurance: 1. Claims service 2. Range of cover 3. Outside of the home 4. Security precautions (theft) 5. Valuables 6. Hidden limits 7. Upmarket customers Visit our Insurance Centre to learn more and buy online.
Ideally, we want to be with an insurer that offers a fast, efficient, stress-free service (preferably with a fast-track service for smaller claims). Avoid those with a bad industry reputation or poor press coverage. Some household names offer bad service; some small, well-managed businesses offer great service, so don't be misled by a firm's size or brand.
All policies cover the usual risks (fire, theft, storm, flood, explosion and so on) but does yours include accidental loss and damage cover as standard? If you are a clumsy DIYer or have small children, accidental damage cover could be essential.
If you remove an item from your home, is it covered? The scope of "personal possessions" cover varies widely: some policies have very low limits for valuables and others have curbs on where you can travel and still have your valuables covered. Look for "worldwide all risks" cover if you like going on your grand tour dripping in jewellery.
Many insurers offer discounts if you fit approved door and window locks and/or have an alarm. Some will insist you lock up completely and set your alarm every time you leave your home or retire to bed; others take a more relaxed view. Most policies only cover theft involving "forcible or violent entry to a building", so you could be out of pocket if you leave your window open and a break-in occurs. The same goes for items in your garden, shed and outbuildings - "no locks, no cover" means you could be uninsured.
If you collect the finer things in life (jewellery, watches, art, antiques and other valuable collections), you may find that your insurer will ask you to list individual items worth more than say, £1,000, and produce recent valuations for expensive items. However, "high net worth" insurers offer much higher levels of cover as standard.
Be wary of low levels of cover tucked away in your policy. Check you have sufficient protection for theft from cars, theft of money and credit cards, lost keys, frozen food, garden gear, bicycles, etc. Some insurers have insufficient levels of cover; others exclude these situations altogether.
If you're what insurers would class as a high net worth customer (with a home insured for over £175k or contents worth over £50k), you may be better off using a specialist insurer. Market leader Hiscox is the only home insurer endorsed by the Law Society for its quality service. Sterling Insurance is another HNW insurer with a good reputation but only operates via insurance brokers. Finally, the seriously well heeled should always consider using a broker to locate a policy that's tailor made to suit their needs!