Saving on insurance

Insurance, we all need it for one thing or another – whether it’s your car, your home or even your life – the insurance industry has products for everything.

However, whether these products represent good value for money, and whether you really some of them is an entirely different matter.

Every UK household wastes hundreds of pounds a year on overpriced or unnecessary insurance policies. With the average cost for buildings, contents and car cover now at £1,000 a year, consumers cannot afford to pay over the odds. By shopping around for the best deals and scrapping unnecessary policies, bills could be reduced by up to 50 per cent. Read on and see where you could cut your costs.

Shop around

The insurance industry is vast. This means that there are a lot of different policies out there for you to choose from. Some of them represent good value for money, and some most certainly do not. Just by shopping around for the best policy can save you a small fortune.

When renewing your policy, check sites such as Moneysupermarket.com, Confused.com or Gocompare.com. Remember to look at the level of cover as well as price because the cheapest deal may not be the most comprehensive. Some insurers, including Direct Line and Norwich Union, do not appear on comparison sites, so you have to contact them directly for a quote.

Buy Online

If you are intent on buying from a particular insurer, do so from its website. Even when using comparison sites light those mentioned above, it’s always worth getting directly in touch with those offering the best offer through their own website. You may be able to secure an extra discount by going direct to the provider.

Don’t bother with expensive payment protection insurance

Payment Protection Insurance (PPI) is often sold together with financial products such as loans, credit cards, mortgages and Hire Purchase’s to cover repayments if the borrower becomes unable to pay because of accident, sickness or unemployment.

While these policies can cover you for a limited time if you are unable to meet your financial obligations, they are normally full of clauses that almost always absolve the insurer from paying out and more often than not, you will find the policy is not worth the paper it is written on.

Adding PPI to a loan increases the monthly repayments significantly and the likelihood is that you will never realise any benefit from parting with your money. A more comprehensive policy, such as ‘real life’ cover, would be a better option (See below).

Consider calling it a day with mobile phone insurance

Insuring your mobile will add to your monthly bill and usually will not cover you for every eventuality that may lead to your phones disappearance or demise. Most mobile insurance policies will also require you to pay an excess in the event of you making a claim.

If you already have home insurance, it is likely that this will give you the same scope of cover for your mobile phone as a dedicated policy would, without the extra expense.

Don’t fall for ID theft protection

Many people are becoming increasingly concerned about identity theft, and financial services providers have capitalised on this. Premiums for ID theft insurance can cost about £7 a month, which usually covers access to your credit record and losses through fraud. But you can see your credit record for £2 from the three credit reference agencies - Experian, Equifax and Callcredit - and banks cannot hold you liable for fraudulent activity, provided that you have not acted negligently.

Pimp your ride with extra security

There are a host of measures that you can take to reduce your car insurance. In the extreme, the best measure you can take is getting a smaller, cheaper and less powerful vehicle, but if that’s out of the question there are other measures you can take to reduce your premiums.

If you have a driveway, or better still a garage, use it to store your vehicle. Just having your vehicle stored off public roads can reduce your premium.

Also consider adding security to your vehicle to reduce the risk of having it stolen. Tracking devices and immobilisers attract the best discounts, while fancy modifications and alloy wheels, which attract thieves, can add to your premiums.

Secure your home

Fit smoke alarms in your home and a fire-extinguisher in the kitchen. Install a burglar alarm and put five-lever mortise deadlocks on external doors and key-operated locks on all accessible windows. Also consider getting some security lighting as an effective deterrent to any prowling thieves.

Keep trees that are close to your house trimmed back to minimise the amount of water sucked up through the roots. The drier the house foundations, the greater the risk of subsidence.

Every winter, thousands of homes suffer flood damage because water pipes freeze and then burst. Adequately insulating your pipes could spare you the headache of flood damage, and the cost of a plumber, as well as a much higher insurance bill.

Utility companies

Utility companies specialise in supplying your gas, electricity and water – but not your insurance. When arranging your utility suppliers, they may try to sell you all kinds of cover. Water companies, for example, may sell standalone cover for damage to water pipes. However, it may be cheaper to take out home emergency cover, if you do not already have this as part of your home insurance. This should cover most, if not all of your home’s infrastructure and will cost you a pretty penny less than taking out standalone cover from all your utility suppliers.

Don’t be led astray with travel insurance

Surprisingly, large numbers of holidaymakers continue to buy their travel insurance from their travel agent or currency provider, which can be an expensive mistake. The best deals are to be found online at websites such as Travelinsuranceweb.com, Cheaptravelinsurance.co.uk and Insureandgo.com, but you can use comparison websites to compare prices and cover. If you make more than two trips a year, it may work out cheaper to buy an annual policy, rather than single-trip insurance.

Real life cover

With unemployment on the rise, it is not unwise to prepare for the possibility that you to could one day find yourself unexpectedly out of a job. Real life cover is designed to protect policyholders from almost any scenario that leaves you unable to secure an income; including redundancy, illness or injury.

Premiums for a 30-year-old male non-smoker taking £100,000 of real-life cover for 35 years would typically be £21 a month without unemployment cover, or £38 with this cover. It will pay out 1 per cent a month of the sum insured - in this example, £1,000 - for up to 12 months.