Do you really need home insurance?

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With the seemingly endless rising cost of living, it can feel like bills are coming out one after the other and the money isn’t necessarily always there to cover it all.

The natural thing to do is to look for areas where you can cut down costs, cancel non essential subscriptions and find ways to lower bills.

So, is home insurance one of those areas you can save money?

If you have a mortgage on your home, you’re most likely to be required to have home insurance as part of your mortgage contract. The same is sometime true of life insurance.

However, even if you’re not contractually obliged , most people are unlikely to be able to cover the cost of replacing or rebuilding their home in the event of serious damage or destruction. Therefore home insurance is probably a necessary purchase for most people.

While 30% of people (according to a YouGov survey on behalf of HSBC) feel that home insurance is expensive, 49% agree it’s a necessary purchase, with 41% finding having home insurance gives them peace of mind.

How much home insurance do you need?

There are two main types of home insurance, buildings insurance and contents insurance.

When working out how much home buildings insurance you need, you’ll need an estimate of how much it would cost to rebuild your home from scratch. You may have received a valuation for this with your mortgage application, or some insurers may provide you with an estimated value.

When it comes to contents insurance, you’ll need to work out the value of all your possessions in your home, and how much it would cost you to replace all of those items.

Can you save money on home insurance?

Although home insurance is something most of us can’t simply cancel to wipe out the bill entirely, it doesn’t necessarily mean it’s not possible to reduce insurance premiums.

Researching policies to make sure you are getting a good deal is a key factor in making sure you have the cover you need at the best possible price. 47% of people say they spend up to an hour researching, with 60% using price comparison sites to compare insurers, which is a great way to quickly and easily compare what’s included from each insurer at what price.

It’s also worth considering recommendations from people you know, and checking out reviews from other customers who’ve already purchased and can give feedback on the service.

Once you’ve got an overview of pricing and offerings of different insurers, you can break it down further to decide exactly what you need your policy to cover, which may mean you can save even further.

For example, you may not wish to take out accidental cover, or you may decide it’s worth choosing to have a higher excess on your policy which usually brings the total cost down.

You can also often save money by choosing to combine your home buildings and contents policies into one joint policy.

It’s also worth checking out whether your chosen insurer offers a discount rate for paying annually rather than monthly, and whether there are any fees incurred should you were to make any changes.

Even though it can be unpleasant having to pay those insurance premiums, it’s reassuring to know that if the worst were to happen your home is covered. If you’ve done your research well, you can feel confident in knowing you’ve got the best value policy for your needs.

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