Home insurance advice when purchasing

First and foremost when purchasing your home insurance, you must understand that you are not obliged to take out your buildings and contents insurance with the bank or building society which arranged your mortgage for you. The only exception to this is when you have received a special mortgage deal that compels you as a condition to purchase 'their' insurance.

Some people will find this a small price to pay in order to get a good mortgage deal, and convenient to boot, but you would be well advised to do your maths in this regard. You may not be offered a good deal, and there is a possibility that the savings on your mortgage payments will be outweighed by the extra you have to pay on your home insurance premiums.

Mortgage lenders say that the reason they try to push their own insurance products is to make sure that you have the correct policy to protect their investment. Even if you arrange your own insurance, your mortgage provider will probably wish to approve of the insurer and will wish also to check your details. You should remember that not all insurers are reputable, so the mortgage lenders have a legitimate concern.

Another good bit of advice for you is that you shouldn't cut your insurance premiums by cutting back on the cover you are asking for. You need this cover, and if something has happened to your home, you will want to get it rebuilt or you will want to replace your possessions, which is the point of the home insurance premiums in the first place.

Look at the security in your home. Look through the eyes of a burglar. Should you have a good burglar alarm? Should you improve the locks you have on your doors and windows? Ask your local crime prevention officer for a list of measures that you could take to improve the security of your home. You can also ask your insurer for this. Are you a member of a neighbourhood watch scheme? If not, join, or set one up.

You should also take advantage of the competitiveness of the home insurance industry. The industry has many companies within it and competition is fierce. With a bit of shopping around, you can increase your chances of finding a cheap premium. But don't just compare prices, compare what each policy includes, to make sure you are comparing like for like.

Having shopped around, you may find that you are not satisfied with the amount of your premiums. In this case, think about whether you would benefit from paying a higher excess, which is when you have to pay a larger amount towards a claim, but your premiums should be reduced.

 

 

 

 

 

 

© AskFinancially.com 2008

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