Buying property insurance

Buildings insurance covers the house’s structure and all the permanent fixtures and fittings. It covers these against floods, storm, fire, explosions and malicious damage (all small print being equal). It only applies to property owners, so if you are renting it is the landlord’s responsibility.

It is usually a mandatory requirement for a mortgage on the property, but there is no obligation to get the insurance with the mortgage provider. There is no need to cover the market value of the house – you would just end up being over-insured and paying far too much in premiums. It is important, though, to cover the re-build value: the cost to rebuild the house. It is not always cheaper to combine buildings and contents in the same policy- ask for quotes on standalone policies too.

All insurance policies are based on risk assessments. So if the aim is to cut the cost, strive to cut the risk. For example: put approved locks on all your windows and doors; have an approved burglar alarm installed - this will reduce your premiums and join neighbourhood watch. You might consider increasing your excess - a higher excess can be a risk worth taking for the effect it has in reducing the premium.

You might also try discussing your premium with the insurer if you have never made a claim or if your age might be a positive factor from your perspective. There are great savings to be made and it does no harm to ask, especially if the insurer gets the impression you might walk away.

Another way to lower your insurance premiums might be to apply for a new insurance quote, not just wait for a renewal quote from your old insurer. An insurer will be more inclined to be competitive if there is a chance of winning a new customer, not just retain an existing one. 

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