by Ian Yates

Created on: March 28, 2008   Last Updated: May 07, 2008

With the ever increasing cost of living we all have to keep a lookout for ways of saving money and reducing your home insurance can be one of the easiest ways to save a few pounds.

To begin with you should look at your buildings insurance, you may find that you have the full cost of your house insured which is not the best thing to do. You must realise that when you bought your property you also bought and paid for the land upon which it stands, therefore it stands to reason that you only need the insurance to cover the cost of the house, NOT the land it was built on. If your property is worth 200,000 pounds then you may only need to insure for building purposes 125 - 150,000 pounds, a substantial saving.

Now you know how much you need to insure your building for you must take a look at your contents, do you want new for old cover, do you have any single items worth over 2000 pounds, how much would you require to replace your entire wardrobe? These questions and others will be asked by the insurer so have a good idea before you start, but remember that the current market value for goods may have dropped, especially with electrical items, for example that TV you paid 1500 pounds for may now only cost 650 pounds brand new, so adjust the value appropriately. Take a quick look through something like the Argos catalogue to get a good idea of the price of your contents at todays prices.

The one biggest area to make savings on your home insurance is the amount you are willing to pay as excess if the worst does happen. You will pay significantly more with a 100 pound excess than if you were willing to pay a 500 pound excess. The insurance company is happy to offer a lower premium for this as they know that the first 500 pound of any claim is going to be covered by you, unfortunately for you this now means that any claim below this figure will not get you any insurance money. Use the excess to your advantage if you can, but be careful how you use it.

Finally it used to be said that a bit of legwork before your insurance needed renewal would save you money in the long run, whilst this still holds true there are now many "compare the market" websites and companies out there that the hard work is already done for you. Instead of the laboriuos hours spent on the telephone getting quotes you can now do it all from the comfort of your own front room via the internet. Again it is still worth trying a few different comparison sites because you may find one with a slightly cheaper quote. This is all down to how they take their commission from the insurance companies. In a lot of cases you will find it cheaper to do this than contact the insurers directly as they offer substantial discounts to brokers.

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