When you receive a home insurance renewal from your existing provider it’s good practise to shop around to see if you can save some money.
Quite often though, the premiums you see will be much higher, and it could be because you got a like-for-like quote based on what’s called ‘blanket cover’ for the buildings and contents figures.
For example, some insurers offer a renewal for £1 million of buildings cover but if your house is only worth £250,000 then the rebuild cost is likely to be even less and therefore you would only get this amount paid out if the worst happened.
If you asked for £1 million of cover then you are likely to pay a higher premium than if you had only put what you actually need, which is likely to be much lower.
So what is ‘blanket cover’?
Some insurers save you the hassle of working out what your buildings and contents are actually worth by offering blanket cover. Your contents may only be worth £20-25,000 but you could be offered blanket cover of £40,000. And your buildings rebuild cost could be just £200,000 but you’ll be offered cover up to £1 million to save you having to calculate the real value.
This serves two purposes - it’s less likely that consumers will be underinsured when they’ve underestimated what their property or contents are worth and it saves you time getting proper valuations to add up the cost of your belongings and valuables. However, on the flipside it could also cost you more as you are paying for cover you don’t need.
Sometimes you may not even ask for blanket cover but it will be offered, and so the next time you renew it could then push up the costs when you try and compare similar levels of cover, as you simply don’t need that much.
At PayingTooMuch.com we can offer blanket cover for home insurance if you don’t want to waste time calculating the rebuild cost of buildings and replacement cost for your contents. Each insurer offers a set figure for buildings and contents, and for most people these are generous cover amounts to give you peace of mind that should the worst happen you won’t be underinsured.
Use the actual value
However, if you’re happy to work out your own valuations then you could save money. The online quote screens on PayingTooMuch.com offer an estimate of the rebuild cost which is provided by the Royal Institution of Chartered Surveyors based on your postcode and number of bedrooms.
To calculate your contents go around every room in your property and work out how much it would cost to replace everything which isn’t built in - including carpets, sofas, electrical items, white goods, valuables such as jewellery and watches, and not forgetting the outside areas including sheds and gardening equipment. Then you will have peace of mind that you’re not paying for cover you don’t need but are adequately insured should you need to claim.
To discuss any aspects of home insurance give our friendly team a call on 01243 219333, or get a quote at PayingTooMuch.com.
