How To Pay Less On Home And Contents Insurance

By:Michael Challiner

Buildings Insurance went up again last year, costing homeowners another 1% a year, taking the average to just over Ł205 for a year's insurance. Contents insurance also went up, this time by 2% - now it costs the average homeowner Ł151 a year. However, some lenders are hiking prices even higher than that – Norwich Union for example, raised its prices by a whopping 6% last year.

The question is - why? There's so much competition out there, you'd expect prices to be falling, not increasing – but there are other forces at work, as we go on to discuss.

No 1 – the cost of having a house repaired or rebuilt

Labour and building materials are getting more costly, so when the insurance company calculates how much it would cost to rebuild your house, prices are higher. This is due to inflation, and the same thing affects the insurance company and its own operating costs. Wages, bills, office rental – all these costs are increasing year on year – so of course insurers have to factor these in.

No 2 – the weather

The British weather is getting more and more tempestuous, whether it's due to global warming we are not qualified to say, but it's a fact that we have been experiencing a lot of extreme weather in the past few years. The 1987 hurricane was a freak occurrence, but flash floods such as the incident in Boscastle, Cornwall, Helmsley in North Yorkshire, and Carlisle are making the headlines on a regular basis. The Association of British Insurers has stated that the average insurance claim due to flood damage could be anything from Ł15,000 to Ł30,000, making huge dents into the insurance industry's profits. In fact, floods cost insurance companies millions every year.

No 3 - Burglary

Claims due to burglary have been going up, now average at around Ł1,400. The 2 main causes are:

• From digital cameras to laptops, game consoles to ipods – our houses are full of electronic gadgets with a high value bought new, and a high value resold. Burglars are after these items and it's hitting the insurance industry where it hurts – their pocket.

• Burglars pick posh neighbourhoods to ensure they get away with the best items - with expensive items like jewellery for the taking, the value of these kind of claims is increasing.

Insurance companies use statistics relating to a postcode area to calculate premiums for everyone in that area. If your neighbours have suffered subsidence, or your area is near a river which has been known to flood – you will have to pay higher premiums. Similarly, if people in your area have been broken into, then it will be assumed that you are at a higher risk of making a burglary claim too.

Having a no-claims discount is a help when it comes to offsetting the annual rise in premiums, but insurance companies cap these discounts once you have 5 years no claims, so you will not get any further discounts.

So is there any way to avoid the rising cost of home and contents insurance?

The first thing you can do is look around for the best deal. Try the Internet for the best deals, because most insurance companies offer a discount, often 10%, for customers that buy online. You will also save if you pay by direct debit. It's tempting to accept your current insurer's renewal quote but don't be fooled – the small amount of effort it will take to shop around will pay good dividends. One of the reasons for this is because insurers always offer their best deals to new customers, existing customers are virtually penalised for showing loyalty!

Improving your home security is another good way to reduce premiums – while giving you essential peace of mind. Neighbourhood watch schemes, external security lighting, a burglar alarm, security locks on windows, and industry-recognised locks on external doors will make a difference. Obviously these things cost money to install, but they pay for themselves in the long run.

Play the insurance company game and you will always win – shop around, be prepared to move insurance company every year, and don't accept any high prices. There's always a better deal out there!

Digg del.icio.us Blink Stumble Spurl Reddit Netscape Furl

Article keywords: home, insurance, lower, premiums

Article Source: http://www.articles2k.com

Michael Challiner has 15 years experience in financial services marketing at senior level. Michael now works as the editor of Lloyds Insurance underwriting who offer home insurance

Top Insurance Articles
1). Growing Old By : Joseph Kenny There are a couple of things in life that we know, at some stage, we will be worried about. Growing old certainly seems to be one of them. More and more, our culture is becoming obsessed by the cult of youth. Not only are film stars and musicians young and beautiful, but increasingly, politicians and newsreaders are getting younger also. Add to this.
2). Health Care Eligibility For Unauthorized Migrants - Moral & Practical Implications By : Erin Shaughnessy Various organizations and government officials have cited estimates for the number of illegal immigrants at between eight and twenty million. With rising health care costs as a major issue for most Americans, this article considers the moral and practical issues of providing medical care for uninsured immigrants. According to a research report entitled “The Size and Characteristics of the Unauthorized Migrant Population in the U.
3). Determining How Much Life Insurance You Need By : Stephen L. Nelson, CPA When considering life insurance, you’re planning and preparing for an event most of us would rather not think about. But life insurance represents a critical step in managing your personal finances and ensuring your family’s well-being. The Two Approaches to Life Insurance You can use one of two approaches to estimate how much life insurance you should buy: the needs approach or the replacement-income approach.
4). Can Car Insurance Be Affected By Your Bad Credit History? By : Joseph Kenny If you have bad credit you can be denied car insurance! The protections afforded to the consumer since the Depression of 1929 no longer exist. The Financial Laws passed through Congress in 1992 allowed banks, insurance companies, investment firms to handle banking, insurance and investment operations. Laws passed after 1929 had prevented banks from.
5). How to Get Cheap Auto Insurance on the Internet By : Heather Colman If you have a connection to the Internet and a computer you can easily find cheap auto insurance. With more and more businesses turning to the Internet to service their customers and increase sales, it's no wonder you see an insurance man on every virtual corner. Not only are most of the major companies online today they now provide insurance quotes and the ability to buy your policy right from their websites.
6). Gap Insurance: A Financial Safety Belt By : Peter Garant Why is gap insurance considered as a financial safety belt? Simply put, it keeps you from being financially ruined when disaster hits your car. For example you are in this situation, you bought a late-model car three months ago using a car loan with a regular car insurance. The car costs $30,000 and you have already made three payments of $900 each month.
7). Eight Rules for Saving Money When You Buy Insurance By : Stephen L. Nelson, CPA By following the eight rules explained here, you can save money, and just as important, you can save yourself from making serious mistakes when you shop for and acquire insurance policies. Rule 1: Buy Insurance Only for Financial Risks You Can’t Afford to Bear on Your Own The purpose of insurance is to cover catastrophes that would devastate you or your family.
8). Critical Illness Insurance The Non-Disclosure Problem By : Michael Challiner If you're in the unfortunate position of having to make a claim on your critical illness insurance policy, the last thing you want is insensitive hassle or apparent non co-operation from your insurer. But according to numerous newspaper articles, that's precisely what's happening. The core problem is that before they'll pay out, the insurer will always want to make exhaustive enquiries about your past health record.
9). Pssst - Want To Know A Secret That Banks & Car Insurance Companies Don't Share With You By : Tom OLeary Every single driver in the U.S. is required to have Car Insurance. And most of drive around confident that we have adequate coverage to protect us should we ever be involved in an accident. Yet, almost 97% of all drivers are not adequately protected...and don't even know it. Here's what I mean. Let's say you're involved in an accident and it's serious enough that the car is considered a "total loss" by your Insurance Company.
10). Life Insurance & Why It’s Important For Your Family By : Daphne Succes It’s sad to think about, but life insurance is something that everyone needs to consider. In the event of an unfortunate loss, an individual often wants to have the peace of mind in knowing that his/her family will be financially secure. Life insurance can be obtained in a number of ways, including from a national insurance provider, various credit cards and/or certain employers.

New Insurance Articles
1). The Facts About Life Insurance Quotes Online By : Michael Connelly A discussion on the topic getting life insurance quotes online.
2). How Students And Teen Driver Get A Cheaper Auto Insurance By : Grace Navas This article offer the tips on how to find lower insurance rate for young drivers.
3). Protecting The Largest Purchase Of Your Life By : John Layton How to protect your most valuable investment. Basic information on home insurance to protect the largest investment the majority of people will ever make.
4). Term Life Insurance for Smokers - 7 Critical Facts By : Tim C. Smith If you are a smoker the first consequence is higher rates than a non-smoker. The rates can be up to three times as high as a non-smoker policy so the cost difference can be considerable.
5). Dental Insurance For Family - What Family Dental Plan Should I Enroll In? By : Mike Singh Having the right family dental insurance is extremely important for maintaining your health. Find out which plans fit in with your family needs.
6). When To Consider Selling Your Life Insurance Policy? By : Paul Sherman A Life Insurance Policy is a personal property, like a house, car, antiques, old painting or stocks and bonds. You can sell your life insurance policy like you sell your other personal property items. Life insurance may now be viewed as a traditional asset that can be purchased or sold. Sale of Life insurance policy is called as Life insurance settlement, Life settlement or Senior settlement.
7). Life Insurance, A Great Investment Opportunity By : Mika Hamilton Insurance is often the safe and most risk free approach to investment. Most people think they are sufficiently insured when they are not. Hardworking people spend a lifetime earning what they have. Our personal wealth is a coupling of family and our income early potential.
8). All About Home Insurance Leads By : Oliver Turner After loads of man-made and natural calamities in USA the Home Insurance market has come much into prominence. And at present the competition is at its peak. Homeowners Insurance is a guarantee, which pays the cost of your house if it gets damaged in some natural or manmade disasters like fire, floods, storms etc. To get a good home insurance quote we often turn to agents.
9). Health insurance plans By : Janani Health Insurance: Health insurance, which is coverage for individuals to protect them against medical costs and give them a surity to a secured life in this unsecured world with day to day accidents, enormous infections and diseases which may be highly fatal such as Tuberculosis and other viral infections, Genetic disorders that requires relatively high costs for treatment and diagnosis.
10). Life Insurance Online By : Robert Lawrence There are many types of life insurance policies. Before you venture out for one, learn about them and see which one is applicable to your needs best. The following are the most common ones: 1. Term life insurance: This type of insurance is the most basic of all. Its one and only function is to cover your life with an amount of cash which on even of your death will be given to your nominee.