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!
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?