Home insurance renewal

Tuesday, 8th April 2008 11:24 - by Resident IFA

My Mum called me yesterday evening, querying an ‘add-on’ noted down on her home insurance renewal letter. In this instance, it is nice being financially aware and financially qualified, helping her see through the jargon. The particular point she was questioning was ‘Legal cover’. This provides money i.e. £25,000, towards legal costs for pursuing losses that are not insured under your basic home insurance policy. Examples of other policy add-on’s are: - Extended accidental damage cover - Possessions taken outside of the home - Bicycle cover - Home emergency cover i.e. your boiler breaks down Add to this the other factors that can be taken into account by the Insurer, and it becomes a minefield! Such factors are: - Postcode - Number of bedrooms - No-claims bonus - Flood and/or Subsidence risk - Use of home as office - Security measures: i.e. Burglar alarms/Neighbourhood watch - Outbuildings - ‘Let’ properties - ...and the list goes on! As always, I urge you to look to an Independent Broker for advice and to make sure you have appropriate amounts of cover for your individual circumstance and buildings/contents values. I sleep soundly at nights knowing that my Mum receives good advice, her broker looking at the most suitable and cost-efficient cover for her at each renewal date. Don’t simply settle for your home insurer’s renewal premium. Remember... laziness costs! As an aside, it interested me to see the ‘worth’ of insurances on the basis of how many pennies get paid out in claims for each pound taken in insurance premiums. If, for every £1 taken in premiums, 75p is paid out in claims, the claims ratio is 75%. The higher the claims ratio, the better value-for-money the insurance is. In 2006, the ratio for Home Insurance was 54% (Source: Association of British Insurers (ABI) Statistical Overview of UK Insurance, published in September 2007), not one of the highest – Life Insurance was the highest at 110% - but not the worst either. Until next time...