Martin Lewis issues urgent home insurance warning – check now to see if you can save £100s by locking in prices
MARTIN Lewis’ MoneySavingExpert has issued an urgent home insurance warning that could save you hundreds of pounds.
The consumer website revealed how you can cut costs by locking in a new deal before prices rise in its latest newsletter.
Home insurance prices have risen by 42% in the last 12 months and are expected to go up further, according to Consumer Intelligence.
But, MSE said you can lock in a new deal now to shield yourself from the future price hikes.
Even if you are not close to renewal, a number of insurers hold the price they quote you for up to 90 days.
This includes Aviva, Churchill and Privilege, while John Lewis Insurance holds quotes for up to 60 days.
Once you’re locked into a new deal, the price won’t change as long as your details don’t change and you can go with a different policy if you find a cheaper deal in that time.
You can also cancel your home insurance policy mid-way through and get a pro-rata refund if you paid upfront.
You will usually have to pay a £35 admin fee to do this, and won’t earn the year’s no claim’s discount, but it can make for an overall saving if you end up locking in a much cheaper deal for 12 months.
MSE said: “Home insurance costs have risen 42% over the last 12 months, the highest-ever rise recorded by research firm Consumer Intelligence, and it says there’s little sign of a slowdown.
“So even if you’re not at renewal, check whether you can lock in a decent price to protect against possible future rises.”
Home insurance costs are soaring for renters and home owners, with figures from consultancy Pearson Ham revealing that prices have risen by 63% over the last two years.
Stephen Kennedy, the company’s director, said the “significant” rises are due to extreme weather and inflation driving up costs for insurers.
“As these factors continue to impact the market, it is likely that we will see sustained pressure on home insurance prices in the near term.”
How else to cut home insurance costs
Buying a new home insurance deal ahead of renewal is one quick way to cut costs, but there are others.
Locking in a new policy at the exact right time can get you the best prices as well – this is usually 21 days before renewal, according to MSE.
What is home insurance?
HOME insurance is designed to cover you in the event of fire, flood, or theft or loss of any item inside it.
There are two types of home insurance policy – contents and buildings.
Buildings insurance covers the cost of repairing any damage to the structure of your property which might have been caused by a fire or flooding.
The “building” includes elements like your roof, walls and floors as well as permanent fixtures such as windows or fitted kitchens.
Contents insurance says what it does on the tin – it covers you in case the contents of your home are damaged, lost or stolen.
You can buy either buildings or contents policies separately, or combined so you are covered across all scenarios.
Not all home insurance policies cover the same things though, so it’s worth shopping around.
You can use price comparison websites like Compare the Market, GoCompare and Uswitch.
Most home insurance policies also come with an “excess” – the amount you have to pay towards a claim.
Increasing your excess will see your policy go down, but means you’ll have to fork out more if you have to make a claim.
A couple of days either side of these won’t make too much different though, so don’t worry if you can’t lock a deal at this exact time.
In any case, don’t wait for your home insurance policy to auto-renew as you will likely end up paying much more than you should.
Instead, shop around beforehand to find the deal best-suited to your needs.
You can use price comparison sites such as MoneySuperMarket, Go Compare and Confused.com.
If your firm offers you a new policy that’s much more than what you have found, you can haggle for a cheaper deal.
If your firm refuses to offer you a cheap policy, you can always go with a new company.
Besides that, make sure the policy you are taking out is actually well-suited to you.
Go through the main terms and conditions to check you’re happy with everything, and check the provider is regulated by the Financial Conduct Authority (FCA).
Remember too, if you have a claim unfairly rejected, you can escalate it with the Financial Ombudsman.
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