Cutting costs can be a tricky business. Saving money takes time, and time is a valuable commodity. The supermarkets sell us countless bargains, so why is it that when we try to save we sometimes end up actually spending more? Setting aside time to work out what we really want and need is a good way to make sure we buy the right things and avoid those costly impulse purchases.
What is more, the larger the purchase the more important it is to look carefully at what we are buying. Insurance is a case in point. It is not something that we choose every day, and it is all too easy to simply let last year’s cover renew rather than take time to sit down and reappraise the policy.
When it comes to home insurance, it is often the case that two policies are bundled together: buildings and descriptions. These are actually two separate things, but it makes life easier to put them together, and insurers often quote a discounted premium to obtain both tranches of business at the same time. Mortgage lenders insist that buildings cover is taken out, as this protects the ‘bricks and mortar’ of the property. It also covers things like outbuildings and permanent fixtures and fittings. This can include things like the fitted kitchen and bathroom suite, as you would be unlikely to attempt to take these items with you when moving house.
The descriptions covers furniture, clothing, jewellery, etc. That is, all those things which are personal possessions and which would obviously be taken when moving. The main policy is intended to cover much of our ordinary household paraphernalia, but particularly expensive pieces, i.e. jewellery, works of art, etc., need to be itemised on the policy. Contents cover applies to our possessions when they are in the home, but not necessarily when we are out and about, so, for those who carry around a range of valuable items about their person, in a briefcase or handbag, it is important to know that these items are protected under your household insurance. This usually means including an optional extra with your main policy, and this will probably come with its own policy excess.
In the event of making a claim, how items have been damaged or lost is important. Policies are designed to protect against things like fire and theft, whereas they tend not to cover damage rendered by pets or vermin. Other types of accidental damage, such as spillages or burns, can be covered, but you may need to add an optional extra to the basic policy. Wordings do, however, vary, and each insurer sets out clearly what their policy does not cover, so reading the policy summary and documents is essential.
A really quick way of researching home insurance at renewal is to run through an online illustration. This will detail the policy basics, and any extras, and itemise their respective costs. Comparing this to your existing policy might throw up a few surprises, as cover can vary, and what we perceive as essential can alter, depending on our current circumstances. For example, if you have just spent hundreds of pounds on a new cycle a priority would be to make sure it was properly covered both where it is stored at home and when locked up away from home.
Setting aside time at renewal to review your existing home insurance policy and compare it with the best current deals will give peace of mind and might save some money. It may take a little longer than five minutes, but it is likely to be time well spent!
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