Money-saving expert Martin Lewis, Consumer Journalist of the Year 2009, is a writer, TV and radio presenter and bestselling author who specialises in getting you a great deal. In the first of his columns, which will run every two weeks, he explains all about home insurance.
THIS has to be one of the ultimate MoneySaving deals – some home insurers will actually pay to cover you.
There’s a way to play the system, so you not only get a cheap policy, but the insurer gives you more cashback than the policy actually costs.
These days, with recession worries meaning people have to weigh up the cost of any insurance policy against the worry of being burgled, it’s a welcome relief.
I’m not guaranteeing that everyone will get paid, but at the very least, I hope most will cut costs by a fortune.
The record result I’ve had from this system so far is a profit of £67 – a huge amount, considering you also get a decent insurance policy on the back of it.
Step 1. What cover do you need?
IT’S always important to lower your risks: window locks, a burglar alarm and being part of neighbourhood watch all help. Yet don’t assume you need the same cover as before; the recession has changed things.
Buildings cover. This is only needed by those who own freehold property.
If you rent or are a leaseholder, generally the freeholder or landlord has the buildings cover for you.
Many people mistakenly over-cover by insuring the market value of their home. In fact, you’re supposed to cover the rebuild value, the amount it would cost to rebuild your house if it were knocked down and you had to start again from scratch.
The lower cost of building projects and raw materials may also mean that even those who were correctly covered in the past might find that their rebuild cost has dropped. The Association of British Insurers (ABI) has a calculator to help you work out what you should be covering, at abi.bcis.co.uk.
Contents cover. This applies to far more people and, as it says on the tin, strictly covers the contents of your property.
The best way to think about where buildings insurance stops and contents starts is by imagining if you could pick your house up and turn it upside down. Everything that could fall out would be contents; everything that was still in it would be buildings.
However, there are always some grey areas, which is why, if you need both, it’s generally better to get buildings and contents insurance from one insurer, even if it’s slightly more expensive.
It means you won’t file a claim that falls between two companies’ gap.
Step 2. Search hundreds of insurers in minutes THERE’S no one cheapest insurer. To find the cheapest, you need to get quotes from as many as possible.
Luckily, screenscraping comparison websites make that easy. With them, you put in your details, and they whizz the info out, then scrape the quotes off the screen.
Yet often they list companies they have commercial relationships with, meaning they don’t all search the same sites. Therefore, to easily boost the range of your search, use them in combination.
My top three for home insurance are confused.com, comparethemarket.com and moneysupermarket.com, which in total look at 43 different brokers and 37 insurers. It only takes five minutes to search each site. You can, of course, go further, and check those firms which don’t allow access by price comparison sites, such as Norwich Union (norwichunion.com) and Direct Line (directline.com). There’s a full listing and ranking of comparison sites at moneysavingexpert/ homeinsurance Once you’ve found the cheapest quote via a comparison site, always check it directly with the insurer’s own website, to check that no incorrect assumptions were made, that the excesses are correct and the policy is suitable for you.
A quick reminder: there’s no such thing as monthly home insurance. In fact, if you sign up for monthly payments, what happens is that the insurer lends you the money, and charges you interest for it. It’s usually cheaper to pay it all in one go.
Step 3. Grab cashback THERE are special sites that carry paid links from retailers and financial services providers. If you are registered with them, and you click through to the product, they get paid.
Importantly, they then give you some of the money back, so you get the same product, but you also get a cut of its revenue. Not all insurers are included, and you should never choose an insurer just for the cashback.
Yet if your cheapest pick does pay out, then you could be quids in.
Sometimes you can get £75 to £100 cashback on home insurance policies, so if you have quite a cheap policy, you could be in profit after your first year. Sites to look at include quidco.com and topcashback.co.uk.
There’s a comparison service to find which cashback service will pay you the most at moneysavingexpert.
com/maxcashback This is how people make a profit. If your quote is £80 a year, and the cashback is £120, then you’re £40 up.
Step 4. Remember next year ONCE you’re covered, always remember that you tend to pay more as an existing customer than as a new one. Insurers often send their renewal policies as late as they possibly can to encourage you to simply allow it to continue.
Not on the net?
IF you’re not on the web, then it’s worth grabbing a friend or family member who is, to help you get insurance.
Otherwise, it’s a question of calling as many brokers and insurers as you can to get quotes, which can be very time-consuming.
■ Martin Lewis runs the consumer revenge website MoneySavingExpert.com; ensure you get his weekly email so you’re constantly saving money.
Bouquet of the week
I WOULD like to nominate Gary Shadforth, of Ferryhill, for being one of the best train conductors with Northern and an all-round tip top, smashing man. I have known Gary for many years. He is one of the nicest people you could meet.
Many will remember him from when he was meat manager at Presto, in Ferryhill. He always had a smile and a friendly word for everyone. Now he brings the same attitude to his job as conductor on the trains between Darlington and Newcastle. He is loved by everyone and respected by passengers and colleagues.
Geoffrey Gregg, Tursdale.
■ Well done to Gary, who wins a box of chocolates for his excellence in customer service and general sunny attitude.
■ If you want to say a public thank you for good service or to a helpful neighbour, kind stranger or efficient business, write with all the details to Bouquet of the Week, The Northern Echo, Priestgate, Darlington, DL1 1NF, or email jenny.laue@nne.co.uk The person nominated in our main letter gets a real bouquet of flowers or a box of posh chocs.
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