Exact day to take out a home insurance policy to save £60 a year | The SunMay 22, 2023
MILLIONS of households can cut their home insurance bill by buying a policy at the right time.
The average combined buildings and contents insurance premium was £300 in 2022, according to the Association of British Insurers.
Prices are expected to surge for some households by 30% this year due to a rise in subsistence claims, frozen pipe payouts and building material and labour costs.
Subsistence is where the ground underneath a building sinks, dragging the foundations down with it and in turn making it structurally unsound.
If you're fearing an increased home insurance premium you can easily save money simply depending on when you buy your policy.
Ceri McMillan, home insurance expert at price comparison site Go Compare, said purchasing one 27 days before your renewal date will see you save the most.
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"The numbers show that if you buy your policy on this day, you could pay up to 19% less than if you bought it on the day before the renewal is due," she said.
"As with all types of insurance, the price you pay will be based on a number of risk factors, including the type of property you live in, any previous claims you might have and the area in which you live, to name but a few.
"So while there are some factors you can’t change, there are still ways to save on your home insurance, and it would seem that buying your policy 27 days before the renewal is a good place to start."
With the average home insurance policy costing £300 in 2022, a 19% saving equates to £57 a year, which could come in useful.
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How else can I save money on my home insurance?
It's not just about choosing the best time to take out a home insurance policy – there's a raft of other ways you can save money.
Pay in full
Most home insurance policies come with 12-month terms and you can pay up front or monthly.
If you've got the money to hand, it might be worth opting for the up front payment.
Ceri explained: "You could save around 10% on your premium by paying for the policy in one lump sum as opposed to monthly.
"This is because your insurance provider is ‘loaning’ you the cost of your policy over its term, so it’s very likely they will charge interest on that loan."
This isn't always the case though.
Ceri added: "Some insurers will allow you to spread the cost over 12 months without any interest.
"So if you can’t afford the cost of paying the full amount up-front, this might be a deciding factor in which policy you choose."
The best thing to do is shop around for policies to see which providers will charge you interest on monthly payments.
You can do this on price comparison sites such as Money Supermarket, GoCompare and Compare the Market.
Combine your policies
Home insurance is broken down into two types – buildings insurance and contents insurance.
Buildings insurance covers you if the structure of your home is damaged, including your walls, roof and floors.
Contents insurance covers you for loss or damage to personal items if there is a fire, theft, flooding or other incident.
It essentially covers you for anything not physically attached to your home.
Buildings insurance is usually required if you've got a mortgage while contents insurance is normally optional.
But if you are considering buying both types of policies, it might be best to get a combined premium rather than two separate ones.
Ceri explained: "Often, it works out cheaper to buy a buildings and contents policy together from one provider.
"This is because insurers sometimes offer discounts on combined policies."
If you've already taken out a home insurance policy, it will auto-renew after its term finishes.
This is essentially where your provider will fix a new rate and start charging you for it.
But you should shop around to see if you can get a better quote.
If you find a cheaper one, you can take this to your provider to justify why you want a better price.
Or, you can switch insurers completely.
Ceri said: "Even though a renewal quote won’t be more expensive, that’s still just one price from one insurer.
"Comparison sites will be able to help you compare quotes from a range of insurance companies."
"It’s worth comparing policies annually to make sure you’re getting the best deal for you."
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Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
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