independent

Monday 21 April 2014

Smart Consumer: Shopping around can keep rising insurance costs down

You'd probably guess that home insurance premiums have risen in the last year and you'd be right.

A new review of the market by AA Ireland reveals we are paying 3pc, or €16 more on average, for our home insurance policies. That may not seem like a lot but it's a rise and you'll be paying more if you don't shop around.

A quick ring around six providers for quotes for a four-bed semi-detached in Co Dublin (buildings cover €250,000, content cover €75,000 with a monitored alarm), and I found a difference of €206.41.

The dearest was from AXA at €615.51 with a €350 excess and the cheapest was from AA Ireland at €409 with the same excess.

Allianz, FBD, Zurich and Liberty quoted an excess of €250 and prices ranged from €455 (FBD) to €480.97 with Allianz.

But you may be able to do better than the premiums quoted. Many companies offer a discount if you buy online, and discounts of between 10pc and 15pc can be offered if you hold a second policy.

Look out for discounts for seeking a quote for another policy, being a member (see AA), no-claims history and age-related discounts. And check the cash-back sites. Fatcheese.ie is offering €30 cash-back on AA home insurance policies for clicking through from their site.

Your premium will also go down if you choose a larger excess. Doing that is a gamble, so it's only advisable if you can afford to cover costs for lower claims. To make sure you get the best deal, here are the steps to take:

Shop around

Take the time to contact several providers for quotes, negotiate for discounts and use other quotes as ammunition.

If you took out home insurance that was tied to your mortgage provider, see if you can get a better deal elsewhere by getting a quote directly from an insurance provider. If you've made a large claim in the last few years your options will be limited, so contact a broker.

Rebuild costs

Remember, it's the rebuild cost and not the market value that you need to state for insurance purposes. Go to the website of the Society of Chartered Surveyors of Ireland to check their guide to rebuild costs, as these continually change and have decreased in recent years.

Under-insuring

Do not under-insure to save on the premium. Let's say you insure your home for €270,000 but the actual cost is €360,000.

If you have to make a claim you'd get the lower amount and have to cover the extra costs. It's the same with contents, and bear in mind that even if you have to make a partial claim, say €1,000 for a sofa, but your total contents cover was only half what the contents are actually worth, then you may only get partial cover.

Specifying items

Check your policy to see what the limit is for individual items. It may be €2,000 or €3,000 but if you have something more valuable at home, think about specifying that in your policy.

Accidental damage

You don't have to include this in your policy. It depends how accident-prone you think you are! If you remove it for contents it will decrease the premium by about €20 and by about €60 if you remove it from the buildings cover too.

The truth wins

If you have alarms, a neighbourhood watch scheme in place and so on, you're a less risky prospect for the insurer and your premium will reflect that. But do not pretend you have all this if you don't, because if you do need to make a claim and the truth is discovered, you could find you're not covered.

Irish Independent

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