A couple of weeks back I wrote a post which detailed my spending and the ways in which I am working to cut back my ‘fixed’ costs. In the post I mentioned that my home insurance was due for renewal at the end of March and I have been working diligently to find the best deal.
I have been with my current provider for a year and it was a product that was selected on my behalf by my financial advisor. I am well aware that he would have received a nice incentive (commission) for signing me onto this policy, but given that he is a family friends and that I didn’t have the time to arrange the policy for myself, I let it run for the year. The renewal letter came through and unsurprisingly the installments are due to go up.
Time to Search for a New Policy
I always view renewal letters as a fantastic reminder to search for the best deal. Better than getting an email, I love companies that send-out a physical letter – usually those where your policy is going to renew automatically and they may have a legal obligation to notify you. If you are not convinced that this is something you want to continue paying, you should consider that home insurance is very likely a condition of your mortgage. By not having a policy, you could break the terms of the agreement and could, theoretically, have your house repossessed. In actual fact, not having home insurance is just a bad idea. Essentially this expense is a necessity and definitely not a luxury.
Unfortunately for most people, it is all too easy to let a policy automatically renew and to forget about it for another year. The potential savings on switching provider are definitely not to be passed on.
After only 10 minutes of searching, I managed to find an equivalent insurance policy that was around £10 per month cheaper than my renewal quote. This equates to £120 a year saving, or £200 per year pre-tax saving! When you work this out at £5000 over the life of a 25-year mortgage, this number quickly becomes even more alarming.
Combine Policies for the Best Deal
It makes sense to maximise discounts by combining insurance policies where available – multi-car insurance policies or combining home/contents/car/pet etc. This can save a huge amount and can help you to obtain considerably cheaper renewal quotes and loyalty discounts. If you hold numerous policies with a single insurer, they can build a risk profile in a much faster way than if you just held a single policy. Furthermore, this can also make it far easier to arrange payments and organize renewals so that they all coincide together!
Compare Everything
While some insurance companies offer you a renewal reminder, others may not. Certainly some services/utilities/subscription services don’t have a given contract, so may never remind you and give you a prompt to compare. Consider one renewal letter a prompt to compare other services – TV / Broadband / Energy etc. While home insurance may be one of many monthly costs – the savings soon add up to and combine to offer a pretty fantastic saving! I think it is time to re-evaluate my energy provider! More to come….
Do you combine insurance policies to save cash? How much have you saved by comparing?
We don’t have combine insurance policies, but it’s not a bad idea. You found some great savings! Good for you! Hopefully you’re able to cut back even farther.
Thanks Tushar… I hope so too 🙂
In the UK, how to do people go about comparing insurance company quotes?
And other service providers, such as TV, broadband, electricity, mobile phone etc. Are the comparison sites, like gocompare, really useful? Do they find the best deal or are you still better off approaching the service provider directly?
In my experience elsewhere in the world, threatening to churn from a service often results in the best deal.
I do not combine either, since I have pretty specific needs for the vehicle insurance (long trips abroad) the companies that offer the best deal only have vehicle insurance. But it is really easy to check every now and then to make sure that is still the best offer on the market.
It is important to be very careful in choosing insurance policies. Comparing plans offered by insurance firms is a good decision. You get the best policy and maximum benefits and pay minimal premium.