Avoid Excess-ive Home Insurance Premiums

CHESTER, England, February 23, 2012 /PRNewswire/ --

 - Opting for a higher excess level on home insurance premiums may be a false
 economy,  warns MoneySupermarket.com

Increasing the voluntary excess level on home insurance policies to reduce the cost of the premium may sometimes cost you more in the long run, according to MoneySupermarket [http://www.moneysupermarket.com ].

Britain´s number one comparison site analysed the cost of home insurance using a range of voluntary excess levels, from GBP0 to GBP500, to evaluate the effect on premium prices. Overall, the research showed a difference of around GBP190 to the annual cost of a premium when comparing the average cost of a GBP0 excess (GBP366) to a GBP500 excess (GBP176)[1], but this saving could end up being an expensive decision if you need to find GBP500 should you need to make a claim.

The research also found premiums reduce marginally when comparing GBP100 excess to GBP300 - a GBP15 difference - and furthermore, when opting for a GBP400 excess, it will actually hike the premium back up to GBP205 a year - a six per cent increase!

Peter Harrison, insurance expert at MoneySupermarket, [http://www.moneysupermarket.com/home-insurance ] said: "It can be a real balancing act when looking at ways to reduce the amount you spend on household insurances whilst still getting the right cover for your needs. Our research shows upping the voluntary excess level on your home insurance premium might not always save you the money you would expect and is something to think about when looking for the best fit policy and price.

"It is important to set your voluntary excess at a level you can afford in addition to any compulsory excesses the insurer might require you to pay. It´s clear that choosing GBP0 excess is not looked on favourably by insurers and they set their premium prices accordingly. It is worth having some voluntary excess to keep annual cover costs down.

"You have to bear in mind that the excess amount you choose will need to be paid before you can access any other money from your insurer should you need to make a claim, be realistic when deciding if opting for an extra GBP100 is worth a much smaller upfront saving. Comparing prices and policy details is the best way to get home insurance cover at the best possible price. Customers who use MoneySupermarket to shop for home insurance save on average GBP126.*

MoneySupermarket.com´s top tips for cheaper home insurance premiums:

 - Shop around and don´t accept your renewal quote - Shopping around for your
 home insurance rather than accepting your renewal premium will save money - customers
 who shop through MoneySupermarket save up to GBP230.
 - Think about your cover - Do you really need accidental damage cover? This can
 increase premiums by 25%. Think carefully about the add-ons you need.
 - Don´t claim unless you need to - The fewer the claims,  the higher your no
 claims discount. So for minor issues that would be inexpensive for you to cover with
 your own cash,  think twice before making a claim.
 - Install a good home security system - Sometimes there are alarm systems that
 might be preferred by an insurer. The NACOSS standard alarm can cut premiums with some
 companies by 7.5%.
 - Join a ´Neighbourhood Watch´ campaign - this can help to reduce your premium
 if you inform the home insurance company of your participation in a scheme. It can
 reduce your premiums by up to 5%.
 - Fire - Fit a smoke alarm and take simple steps to avoid accidents. Most fires
 in the home are caused by smoking or cooking; never smoke in bed,  don´t leave
 cigarettes lying around and don´t leave cooking unattended. Other fire tips include
 closing doors at night to contain fires,  check the home is safe before going to bed
 and keep matches away from children.
 - Don´t smoke - As covered above,  the fire risk greatly increases if you smoke
 cigarettes. Most insurers will now ask if you are a smoker.

Notes to editors:

1. Cost of building and contents insurance

 Premium Premium Premium Premium Premium Premium Premium
 Excess Excess Excess Excess Excess Excess Excess
 GBP0 GBP100 GBP200 GBP250 GBP300 GBP400 GBP500
 1 GBP200.34 GBP157.94 GBP149.46 GBP151.58 GBP149.23 GBP151.58 GBP143.81
 2 GBP266.06 GBP174.32 GBP159.50 GBP156.69 GBP151.58 GBP188.68 GBP151.58
 3 GBP296.80 GBP183.70 GBP169.04 GBP166.05 GBP178.00 GBP196.17 GBP152.39
 4 GBP308.46 GBP197.37 GBP199.28 GBP177.58 GBP190.80 GBP200.38 GBP184.50
 5 GBP349.60 GBP220.48 GBP208.98 GBP192.92 GBP202.37 GBP200.56 GBP157.62
 6 GBP407.04 GBP223.81 GBP221.54 GBP206.48 GBP207.86 GBP202.64 GBP188.70
 7 GBP548.33 GBP224.46 GBP222.60 GBP212.65 GBP210.88 GBP213.06 GBP189.86
 8 GBP557.56 GBP225.75 GBP224.90 GBP213.87 GBP212.18 GBP213.95 GBP191.96
 9 N/A GBP232.14 GBP232.14 GBP217.20 GBP213.32 GBP222.60 GBP199.57
 10 N/A GBP241.58 GBP233.65 GBP217.51 GBP218.36 GBP256.95 GBP202.71
 Average GBP366.77 GBP208.16 GBP202.11 GBP191.25 GBP193.46 GBP204.66 GBP176.27

Sourced by http://www.moneysupermarket.com 01.02.2012

Annual cost to cover a three-bedroom semi with min GBP40,000 contents

Manchester M20

Market Value = GBP360,000

Rebuild Value = GBP210,000

*Based on online independent research by Consumer Intelligence during 01 January 2012 to 31 January 2012

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