Get costs under control

Seven ways your clients can reduce their home insurance expenses – without compromising on cover

In the current climate, homeowners are understandably looking to reduce costs wherever they can. While it is generally a false economy to reduce insurance cover, broker clients can control their home insurance premiums by following this advice from Hiscox’s Art and Private Client division:

1 Look for any duplication in cover, as many people end up paying for the same thing twice. Buying certain products, such as the Hiscox 606 policy, can mean that you don’t need other policies. The 606 policy includes full travel cover for a client and their family, for example, so they won’t have to purchase separate travel insurance.

2 One of the biggest issues insurers face is underinsurance. Because of this, they will often offer a premium discount if they are certain of the value of the insured items. Clients should, therefore, share any valuations with their broker or insurer, and photographing certain items can lead to a further discount.

3 The excess is the amount of each claim that the client is responsible for. If the client decides to increase this excess, they will be responsible for more of each claim. This means the insurer will pay less on a claim, which will usually be reflected in a reduction in the client’s premium.

4 Clients should ensure that their buildings sum insured is the reinstatement value and not the market value. In the event of a loss, insurers pay to rebuild or repair the client’s house, so the sum insured should be the amount it would cost to rebuild the house, not what it cost to buy. As this is usually lower than the purchase price, the premium will be lower, too.

5 Building a consistent, claim-free track record will help clients. Most insurers apply no- or low-claims discounts to their premium rates. Although clients pay for their insurance – and should use it when needed – they should think carefully about whether it is worth making small claims that might wipe out such discounts and result in a higher premium.

6 It may seem obvious, but the lower the chance of the client having a loss, the lower their premium will be. Good risk management – including fire and burglar alarms – reduces the likelihood of losses occurring and is usually rewarded with lower premium rates or preferential terms.

7 Jewellery kept in the bank or in a home safe is less vulnerable to theft, accidental damage, and accidental loss. Because of this, insurers will usually charge clients less if they know that an amount of jewellery is in the bank or safe.