Tips for buying house insurance
Buying a house is probably the biggest investment you’ll ever make, so it’s important to get the right building and contents insurance. Here are some buying tips for finding good and cheap house insurance:
Shop around
Always shop around; never go with the first insurance policy you’re offered or even the insurance offered by your mortgage lender without doing a bit of research first. Differences of £66 a year on buildings and contents insurance are typical; over a 25-year mortgage term, that amounts to £1,650.
Only buy what you need
This is the first rule of thumb when buying house and contents insurance; only get what you need. Too much insurance will cost you more in premiums; too little insurance and you’re left in the lurch when needing to claim.
Make sure it really does cover you
Unfortunately, just because an insurance company has sold you a policy, it doesn’t mean you’re eligible to claim on it! To make sure you are covered properly take the time to read the fine print and have everything confirmed in writing.
Avoid tie-ins and bundling
As the mortgage market becomes more competitive, mortgage lenders are looking for new ways to lure you in via great-sounding low-interest deals. But, they make it up elsewhere – often through compulsory and highly over-priced insurance policies (known as “bundling”) and penalties for going elsewhere (known as tie-ins). No matter how attractive the mortgage offer may seem, it is best to avoid these schemes; because it will cost you in the long term.
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