Building and Contents Insurance
If you own a house you hopefully have it and your possessions insured through either separate or a combined building and contents insurance policy. How much do you pay per month for it? I was surprised to find out exactly how much mine was. See also 'Travel Insurance' quotes for similar variations in travel insurance.
The reason I was not aware of the true cost is that I took out my building and contents insurance with my mortgage provider, in this case Nationwide Building Society I'm not saying Nationwide or other building societies, such as Britannia, aren't competitive on building and contents insurance. Its more to do with the circumstances in which you take out the policy that are to blame for the ignorance.
You are sat in the building society, broker or bank advisors office about to sign a ream of documents each with scary figures and pound signs on. The advisor has gone through the costs properly, explaining how all the fees are broken down. But you are primarily interested in how much this next step up the house price ladder is going to cost you per month in mortgage repayments and whether interest rates are going up or down. An extra £20-40 per month isn't important, is it? Lets put it in perspective in that its probably higher than any utility bills you pay per month. Its probably higher than your phone bill. In fact after your mortgage and food (and regular text addicts) the buildings and contents insurance is probably the highest regular outgoing in your household. Got your attention?
What can you do? Well shop around. Its likely that you don't have to stay with your mortgage provider for your buildings and contents insurance unless it was specified in the mortgage deal. There are hundreds of companies and sites on the web looking for your business. I found an excellent price comparison site into which I submitted the details of a certain Agent Smith who is 32 and lives in a house with a rebuild cost of £115000 requiring £35000 of contents insurance as well. He doesn't need (touch wood) accidental damage cover and lives in a decent area (again touch wood). You enter your details and it submits them to about 20 different insurers. A breakdown of the costs for different insurers can be found here but i was pleased and surprised that I could potentially save £120 per year by changing insurers. The quotes are, like the figures on this site rough guides, and proper values may be obtained by visiting the company sites linking off the search results page. Another comparison site is run by LLoyds TSB which does the same thing for a more limited set of different companies. Alternatively, perhaps try an independent financial advisor. Their fees will probably be paid by the insurer they sign you up with so beware that unscrupulous ones may push you in the direction of the one with the biggest commission.
Ok so you can shop around but is there any way that I can reduce my monthly outgoings even further? Well yes and here are some suggestions
- Carefully add up the cost of your contentsadd up the cost of your contents to replace. You'll be surprised how much it is but don't over estimate as you policy price will be based upon this figure.
- The larger the excess figure you allow the smaller the monthly premium. Is it worth claiming for a £100 theft or damage?
- Do you need accidental damage cover? It will add approximately 20% to the cost of the contents insurance.
- Look for companies that have a no claims discount like for car insurance.
- Will you get a discount if you buy both buildings and contents insurance from the same company?
- Can you get an online only special discounted deal?
In summary have a look at last months bank statement and have a browse around at alternate buildings and contents insurance providers you could save yourself a useful sum of money each year
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