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Home Insurance Beginners Guide

The purpose of this post is to inform and hopefully get people to realise that all Buildings and Contents Insurance policies are not the same. After buying property it’s crucial you get the right insurance policy for you. Our expert mortgage brokers are experienced in finding the right cover for your individual case. We also want to show you how some providers and comparison sites operate. If at the end of this post you decide to ask an expert to help you source new or renewal cover, then my mission has been successful.

1. AN INITIAL LOW PREMIUM WON’T NECESSARILY STAY THAT WAY

Today, in a leading Sunday newspaper, there is an article saying that a 91-year-old’s renewal premium from the Bank had risen to £600 per annum! Her nephew then found the same level of cover for £88 a year.

So here is tip number one: Please don’t assume that your cover will remain low-priced, or that because you buy it from a well-known financial outlet, that it will stay low priced. I know of at least 2 high street names who buy their custom at a loss and make their gains by customers not being engaged enough to check the renewal premium. Speak to an expert!

2. THE DOWNSIDES TO COMPARISON WEBSITES

“But”, I hear you cry “It’s OK, we will go on a comparison website and we will not be overcharged!”
It is, of course, not that simple (life never is!).

Remember why you need the cover

Firstly, it’s important to remember why you’re buying the cover, and no, it shouldn’t be because you want their latest cuddly toy! This is your house and its contents we are talking about, in many cases worth hundreds of thousands of pounds. Don’t be lulled be gimmicks.

Comparison sites are owned in many instances by insurers or banks, so that to a certain extent determines who you get to see and who is not showing up.

Consider the value of the insurance, rather than the cost

Furthermore, the sites are built to drive you to low-cost options. This may seem like a good thing, but in reality, it means that you may not be seeing anywhere near enough actual contents or buildings insurance in ££s for your own needs.

To put that in real terms, this means if you are 40% under insured and you needed to claim £100,000 for fire damage, you will only receive a pay out of £60,000. That’s the last thing you want when you actually need that cover.

These sites also have to make assumptions about you in order to provide you with a quote. To use an example, in a lot of instances these sites will assume that you live more than 400m from water. That’s fine if you don’t, but if you do and you don’t change that detail, any claim you try to make could be invalidated.

Credit Searching

I recently saw a customer who found out that 21 credit searches had taken place against her credit file following an innocent insurance enquiry on a comparison site. If her credit had been of a poorer rating, that number of searches could have had horrid consequences – no mortgage therefore no house. So please, good people, use these sites with care.

3. A CHEAPER UPFRONT COST CAN LEAD TO PROBLEMS FURTHER DOWN THE LINE

What else should you look for? Well, in order to get your business based on price, compromises have to be made and everything else goes to the bone.

That would mean giving you the highest excess, avoiding accidental damage, not including legal cover and scratching out home emergency cover and offering you no personal possession cover.

This means the following scenarios would all NOT be covered:

  • £300 of storm damage to the roof on a £500 excess buildings cover.
  • You have tipped a tin of paint over a brand-new carpet.
  • The gas boiler gives up the ghost on Christmas eve.
  • Your unreasonable neighbours have dragged you into an expensive legal battle over the parking places outside your home.
  • Your iPad and a sports bag were taken from the local gym changing room.

None of those events are covered but all could and should have been. You now start to see why I ask you to consult an expert to show you what all these terms and conditions actually mean.

You now start to see why I ask you to consult an expert to show you what all these terms and conditions actually mean.
Cost will always be important to customers, but expertise should be too.

The good thing here is that any expert is well aware of the challenge of competing with the low-cost options served up by comparison websites. They know that if you show them a quote for £250 a year, the chances are you won’t buy insurance at £400. In other words, their expertise will have to be skilfully delivered with the knowledge and structure required to win your business whilst still giving you meaningful cover at the same. This can only be better for you, the customer.

4. GET A 5 STAR DEFACTO POLICY

My final tip is please buy a 5 Star Defacto policy. Defacto are an agency that review financial products. They use a star rating system to show consumers how good each policy is because not all buildings and contents plans are the same, and the price of the policies reflects this.

Defacto are an agency that review financial products. They use a star rating system to show consumers how good each policy is because not all buildings and contents plans are the same, and the price of the policies reflects this. Many of us will be looking at and thinking about those new super duper Apple phones about to hit the market. Maybe it’s time to research your buildings and contents insurance in the same way as you would buy that dream phone.

Many of us will be looking at and thinking about those new super duper Apple phones about to hit the market. Maybe it’s time to research your buildings and contents insurance in the same way as you would buy that dream phone.

You can, of course, do that yourself, or you can always get an expert to help you

If I have made people think a bit more about what they’re buying with regards to buildings and contents insurance, then I feel this post has had value.

HOW WE CAN HELP

At House and Holiday Home, we use a company called Paymentshield to quote for our customers’ buildings and contents insurance. They only use 5 star rated products from the top insurers in the market.

If you’d like to talk to us today about your buildings and contents insurance, then please contact us on 01453 887179 or you can contact us using our online form.

Alternatively, you can contact me by email: mark@hhhmortgages.com.