Why Contents Insurance Doesn’t Need to Be a Big Bill

A shocking new report from the Financial Inclusion Commission (FIC) has shown that 16 million people around the UK don’t have content insurance in their homes.  This means 35% of homes could risk losing everything if there was a fire, flood or a burglary.  Lower earning households are the most likely to leave content cover off the list with 60% of this number earning less than £15,000.  But are there ways to cut the cost of content insurance but still have cover in place?

Avoid unnecessary cover

One of the biggest mistakes people can make is taking too much cover.  While ensuring you are properly protected is the whole point of the process, it is easy to end up taking too much cover and paying over the odds.  For example, £100,000 content cover might sound brilliant but if you only have £10,000 worth of goods, this is all you will ever be paid out, so you are paying for more cover than you need.

There are also lots of extras you can include on content policies that if you are watching the budget, these might not be crucial.  Accidental damage is one example – people often take it if they have kids or pets but make sure you can get your worth out of it as there is always an excess to pay.  Increased cover for valuables taken out of the home is another one – if you don’t have valuables or don’t take them out of the house you don’t need the cover.

Additional cover policies

As well as the additional cover you can include or emit on a policy, you can also take extra additional cover policies – or not take them if you want to keep costs down.

Legal cover is one example.  It can cover you for a range of legal matters such as disputes over goods but if a claim did arise, you could always use a no-win, no-fee solicitor to take on the case.  And if you don’t use it, you have paid for something for nothing.

Home emergency cover is something that you don’t need if you are in rented accommodation or a housing association property.  Emergency cover is for things like boilers, heating systems and leaking water pipes but these would be handled by your landlord, so you don’t need to ensure them.

Paying for your cover

It is always cheapest to pay for insurance as a single payment as direct debit and other options incur interest.  However, if paying in one go isn’t an option, spreading the cost can mean you pay a small amount each month for the cover and this can be more manageable. 

Make sure you understand how much extra you are paying to spread the payment and what you will pay each month as well as how many payments you will make.  Some companies will take a payment the month before renewal to avoid you having to pay a deposit if you stay insured with them, so payments may be 11 or 12.