Monday 19 February 2018

Play the field for better insurance deals

The cost of insurance continues to rise
The cost of insurance continues to rise

John Farrell

Insurance isn't the most exciting of topics. I would find it far easier to tell my kids what I do if I said I was an AA patrolman.

If you have any interest in your own money, however, paying attention to your insurance is worth the effort.

Most of us buy two main types of insurance every year – one for the car and one for the home. In our experience, people often shop around and haggle for their car insurance but they won't give nearly as much attention to their home policy.

It is definitely worth playing the field when you are looking for motor insurance. We used to think of it as either third-party or comprehensive. That is out of date these days – 'comprehensive' can include any number of bells and whistles that you may or may not want.

Unlike car insurance, it is not against the law to have a home that isn't insured. However, if you have a mortgage, your lender will insist that the building itself is covered, whatever about your contents.

A big mistake that a lot of people make is taking the insurance product offered by their lender.

Home insurance prices fell a little in the last few years but that may not last. The massive damage that arose from the storms earlier this year could push premiums up.

Storm damage is covered by home insurance. You often hear that insurers will not cover 'acts of God'. The phrase is really meaningless. Damage done by fallen trees, flying debris, ripped tiles and flooding are all covered as standard on a home insurance policy, although fences and hedges usually are not.

What can be different is if your car is damaged by a tree. If your motor insurance covers third-party damage only – that is, damage you cause to another car – you won't be covered if your car is damaged by a tree. You might be able to pursue whoever was responsible for the tree – but not your motor insurer.

Here are six tips that should help you bring down the cost of your car and home insurance:

* Look at the extras that are offered under a car insurance policy as they will vary. Strip the extras away and the price may drop – but so will the cover.

* Put your spouse on the car insurance policy with you. It usually makes the policy cheaper, not dearer.

* Don't tell little fibs to get the price down. It is amazing how casually some people do this; conveniently forgetting penalty points or stating that you are an office worker when in fact you are a musician. If you have not declared your details with 'utmost good faith', the insurer is entitled to deny at least part of your claim.

* Remember with home insurance, you are covering for the cost of rebuilding your home if the worst happens. That re-building cost has nothing to do with the property price and is often lower. Mind you, don't under-insure to save money. Think about what it would cost you if you had to rebuild your home.

* If you have an extension or a non-standard construction in your home, you must say so or your cover may be invalidated.

* If you bought your home insurance through your mortgage lender and never changed it, you are almost certainly paying too much. You can save immediately by switching.

John Farrell is commercial director for AA Ireland

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