Published on : Wed, 27 Apr 2005 00:00GMT
by : Paul Dyson

Can you deny that the biggest investment in your life was the house you purchased? Any catastrophe such as a flood, earthquake or some such calamity could leave you with a major setback. Besides, you may also have certain valuable possessions like paintings, artifacts, etc., which you jealously guard. But have you considered whether they are actually 'safe' in your house? If you go on a holiday with the family you may return to find them missing. Let’s face it, without insurance there is simply no way you by which can recover from the loss.

It makes sense to buy insurance for not only your brick-&-mortar but also the contents within. Safeguard your property from the worst that could happen – whether it’s fire, flood, storm, lightning strike, subsidence, earthquake or burglary.

The cost of insurance will not put you out of pocket; on the contrary, it will ensure you are adequately compensated in the event of a loss.

If you are worried about paying high premiums, here are a few tips on how you can minimise the costs yet maximise protection to your property.

Get the right level of cover
Be careful not to keep “cheapest” as your criterion for selection. It may prove to be more expensive than you expect in the long run. Start by assessing the risks you want to protect your property against. “Core risks” may be the same with every insurance company, but terms and conditions would vary. If you are not sure of your assessment, ask an insurance broker to do so. He will help point out the difference between various policies. Example: If you live in a low-lying area prone to floods, you should be aware that the level of alternative accommodation costs provided by one insurance company would differ from another. In the event of a flood, you would be out of home for some months, therefore you must consider whether the amount offered is enough or not.

Buy a policy for the full cover you need. You can minimise the premiums by reducing the risk of fire, flood damage or burglary.

Ways to reduce risks
If you reduce the risk of fire, damage by flood and loss by burglary, you will be able to get cheaper insurance. A few precautionary steps can mean less risk and less premiums.

1. Burglar alarm: If you install an approved intruder alarm, the premiums you have to pay can be reduced from 5 and 15%.

2. Smoke detectors: Fire can destroy many of your prized possessions, so it’s a must-have. If the insurer is informed that you have fitted smoke detectors on your premises, you might get cheaper premiums on both building as well as contents policies.

3. Approved locks, windows, doors: If the area you live in is notorious for its high crime rate, the insurer will expect a certain level of security, the type of doors and windows and the type of locks you use, before they can consider offering you a policy. Talk to your insurer first to find out what is required.

4. Occupancy: Most burglaries take place during the daytime when nobody is home. If someone is always at your home during the day, the insurer may feel more inclined to offer you cheaper premiums as there is less likeliness of a break-in.

5. Minimising the risks of damage due to flood/fire: If you live in a low lying area near a river, these few precautions will reduce the risks of damage or even minimise damage due to flood - (i) move electrical points well above the expected flood level; this way your family is protected from the possibility of a severe electrical shock. (ii) Remove gypsum plaster and in its place have water-resistant material, such as lime plaster. (iii) Timber floors must be replaced with concrete and covered with tiles. (iv) It would also be advisable to replace wooden shelves and units in the kitchen with plastic equivalents. In the event of a flood or fire these changes will pay for themselves by minimizing the damage and loss.

If you follow these few steps house insurance will be more readily available and with less premiums. Consult your insurer or insurance broker before you go about making these changes. They will help assess their benefits and whether or not it is worth making the changes.

Find out your choices
You may not be aware that you would have quite a few choices for household insurance because it is such a competitive market. The cost of insurance whether of property or of contents, varies from insurer to insurer. The average cost of a building insurance policy is currently £209 and has increased only 2% over the past decade. The average cost of contents insurance is £152 which is also slightly up - 5% over a decade.

You could approach a bank, your mortgage provider or an insurance broker and choose from the options. These days, even supermarkets have jumped onto the insurance bandwagon.