Home insurance is one of our least favourite home buys. While we’ll happily shell out on refurbishing a living room or bedroom, handing over money ‘just in case’ something happens to them always hurts a little bit. But what hurts even more is if you’re over paying for that ‘just in case’ scenario.
According to Martin Lewis, you could be doing just that. If you’ve been letting your home insurance auto-renew you could have been overpaying by £1000.
‘Those who stick with an insurer for five years can pay 70 per cent more than switchers,’ Martin Lewis explains on moneysavingexpert.com. ‘We always say NEVER auto-renew.’
The money guru pointed to an example where someone who had taken out home insurance with Tesco Bank saw their insurance jump from £140 to £1,621. Despite not changing anything, the renewal was 11 times more than the original price.
More often than not insurers will lure you in with a cheap price and push it up each year when you renew. The industry calls this price-walking and the likes of the Citizen’s Advice Bureau are already on the case – they’ve submitted a ‘super-complaint’ to regulators, calling it out.
But until any changes are made, Martin Lewis suggests shopping around on comparison websites before your home insurance is due to renew. Always try a few different sites including Money Supermarket, Confused.com and Compare the Market. Also, don’t forget to check deals that comparison websites might miss, such as those offered by Aviva and Direct Line.
The peak time to look out for a new deal is 21 days before your home insurance is due to renew. ‘Leave it too late and insurers view you as a high risk, so charge more,’ the money guru warns.
Martin Lewis home insurance need-to-know
When looking for new home insurance Martin Lewis warns against fall into the trap of just insuring your home’s value as many do. Instead, you should be insuring how much it would cost to rebuild your home if it was knocked down.
Also, be careful not to underinsure the contents of your home. The contents are everything that would fall out of your house if you were to turn it upside down. Even if that means adding up the cost of the pots and pans in your kitchen, underestimating these cost means only part of your contents is protected.
‘Once you’ve found the cheapest quote, try to haggle a bigger discount,’ Lewis encourages. It might sound scary picking up the phone and haggling with the likes of Sainsbury’s, but the payoffs could be big.
Do you know when your home insurance is due to renew?