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How to Obtain Cheap Home Insurance UK - obtaining cheaper home insurance, is one of the reasons why consumers have turned to the internet to source their quotations. Obtaining quotations online is one method of trying to save money, but apart from shopping around, what can actually be done to help bring down the price of your policy? There are a number of things a consumer can consider to help reduce the price of an insurance policy, here are our tips:-   No Claims Bonus - many home insurance providers, now allow a no claims bonus in return for a claim free period (a bit like on your car insurance). Discounts vary from 5% upwards, it may not always be obvious that this discount is available, so its worth pointing it out. Increasing your excess - excess, is the first portion of the loss that you as policyholder elect to pay in the event of the claim. Most policies will come with a compulsory excess of between £50 & £100.00 pounds. You can elect to pay a higher ( voluntary ) excess in return for a discount. These excess discounts can make a difference, make sure however you are comparing quotations on a like for like basis, find out what the total excess payable is. Some insurers include quite a high policy excess and this can distort the premium when in comparison with others. Combining Policy Sections - many people have separate policies covering buildings and contents  unaware of the fact that often substantial discounts are available for combining the two covers under one policy. Often, these covers are due for renewal at different time of the year. It is usually possible to add one to the other and pay a pro rate difference. Improving Security at the Property - in many cases, the insurance company will have a minimum standard of security requirement, before the risk is acceptable.  However, you can still upgrade the security, to include better quality locks on doors and windows or an alarm. Alarms fall in to a number of categories from a simple  " Bells Only" arrangement through to a system that is maintained under contract and involves the property being " monitored" at a central station. If you intend to fit an alarm and are expecting a discount, it is probably best to speak to an insurance company first, not all alarms are the same and it may be a requirement that the system is fitted by a recognised professional body. There are a number of  organisations involved in the home security industry including;  The British Security Industry Association - This is the professional trade association for the security industry and accounts for approximately 70% of the Uk security business.   NACOSS - This body has been in existence for over 15 years are are well known by the Uk insurance industry, most insurers will consider an alarm that is NACOSS approved, to be of a  good quality. NACOSS is the national approval service for companies in the electronic security sector. Operated by the National Security Inspectorate (NSI), the familiar owl mark has recently been extended to cover the full variety of security and fire systems which come under the jurisdiction of the organisation.    SSAIB- Some insurance companies require alarms to be approved by this body. The Security Systems and Alarms Inspection Board is a non-profit making company. Since 1994 it has promoted and encouraged high standards and ethics in the security industry. As well as alarms, you could consider fitting smoke detectors, these are very cheap and can be obtained almost anywhere, other possibilities include; security lighting and even shutters. The above are  all recognised ways of  helping to reduce your premium, something that should not be considered is reducing your sums insured, this could possibly lead to a claim not being settled in full.  When you buy your home insurance policy, you will be presented with a number of important documents.  It is important that all documents are studied carefully to ensure that what you are being offered, matches your needs.   Guide to Home Insurance UK   The Home Insurance Policy Document - there are three main sections of a UK home insurance policy are as follows; buildings, contents and all risks.  Until recently, it was normal practice for a lender to want to arrange the buildings cover on a home they had lent money on.   The reasons for doing so were; to protect their financial interest (the outstanding balance of the loan) and of course, they could earn commission from any product sold. The problem for consumers was that often lenders were restricted in the number of insurers they could place business with and thus the home insurance premium obtainable was not always the cheapest. This practice has now been very much relaxed and normally homeowners are free to buy their home buildings insurance from wherever they choose. In some cases, as a condition of a cheap rate or fixed rate mortgage deal, it is a requirement that the lender arranges insurance on your behalf. Unless this is the scenario, you cannot be forced to arrange home insurance with the lender.  That said if you do arrange cover away from your mortgage lender, they will probably want to see a copy of the policy document and to see their name on the policy schedule. Homeowners often find that by combining buildings & contents under a home insurance policy, they can make savings.   Both Buildings & Contents are available as stand alone policies, many people (particularly flat owners) find that someone else has the responsibility of insuring the fabric of their home and thus they only have to arrange cover in respect of their home contents. All Risks covers (cover for items temporarily away from the home) can only be added to a contents insurance policy. Most home insurance uk contracts will have a number of other sections, where you can include such things as “Legal Expenses” and in some cases "Small Craft" & "Caravans". Although home Insurance polices will vary from one insurer to another, in general there are two standard forms of cover available.    ·         Standard Insurance Perils ·         Standard Insurance perils with extended accidental damage.   These "perils" have been developed and extended over a period of many years and offer insurance protection in respect of a wide range of eventualities that can befall a homeowner. With regard to the building section of a home insurance policy, cover will have to satisfy the terms and conditions of the council for mortgage lenders handbook. Almost all lenders are members of the council and if you have a mortgage on your property, they will want you to confirm that you have a suitable policy of insurance  in force for the duration of the loan ( Basically to protect their interest until such time as you have repaid your mortgage,). The list is quite wide and almost all sudden & unforeseen events are included. Accidental Damage is an option, but most homeowner insurance policies will include a certain amount of accidental damage free of charge.   Regulatory Documents - It is safe to say that most insurers will have a policy wording that is suitable for lenders needs, although, it is worthwhile checking. The FSA, require brokers or sellers of insurance, to point out to a customer, prior to the purchase any significant or unusually restrictions in cover or any requirements necessarily for the contract to be valid. A significant or unusual restriction of cover usually relates to cover, that deviates from the standard acceptable list of perils. Thus if your policy, for some reason, does not include, one or more of the major perils, such as;  flood cover or theft cover or subsidence cover, this should be pointed out to you. A "Keyfacts" document should be provided for you either before or at the point of sale, but these can sometimes be rather generic in design and the insurer may “underwrite" a particular peril out of your policy. There will have to be a very valid reason for them to do so and reasons include, previous claims history or perhaps susceptibility to subsidence or flooding.   It is thus essential that you study your policy document and the schedule of insurance as soon as received. Most policy documents will come with a list of endorsements.  The endorsements applicable to your own policy will be stated on the schedule. Endorsements have the effect of changing the policy wording, they can restrict or increase cover or impose different terms and conditions. it is important that all  endorsements are studied closely.  The policy document will also have a list of general exclusions applicable to all. A cooling off period is provided with Uk home insurance contracts.    You can at your option, opt to include cover for contents insurance which in turn can be extended to include All Risks ( this section of a home insurance policy is designed to cover valuable items away from the home). Your mortgage lender will not insist on you insuring your home contents, it is purely a matter of personal choice; however, some property that it purchased on credit does come with a requirement to effect insurance.   One of the problems that many homeowners experience, is deciding  what to insure under the building section of the policy and what is contents.  In simple terms, the building of your home refers to the following.    1.      The structure of the home 2.      The outbuildings, sheds, greenhouses & garages. 3.      Permanent fixtures & fittings such as the central heating system, bathrooms and fully fitted kitchens 4.      Exterior parts of the property such as fences, paths, drives, patios, tennis courts & swimming pools.   Basically, items to insure under the building section of a home policy are any items, you would leave behind if you moved out or sold the property.  Under the contents section of a home policy, you should insure any item you would take with you, if you moved out of the property (or imagine you could turn the house upside down, contents cover the items that would fall out.)     The Structure of the Market - in the United Kingdom, a home, is probably the largest purchase, most people will make in their lives. The the homeowner will require a number of insurance covers to protect his property, both buildings and contents against a wide range of perils or hazards. UK home insurance is a highly developed and highly regulated industry, and the consumer has a wide range, but perhaps confusing variety of outlets from where insurance covers can be obtained. There are many facets, to this fairly complex industry, but without exception, anyone trading home insurance uk will have to be authorized and regulated by the financial services Authority [FSA]. There are a number of options for individuals and companies depending on the type of advice and service they provide, most companies are fully regulated in their own right, whilst some choose to become appointed representatives or Introducers.   Financial Regulation - following the introduction of the Financial Services and Markets Act 2000, the Financial Services Authority [FSA] were given certain statutory powers with regard to the regulation off the financial services industry in the United Kingdom. It is an independent, non- governmental body. They are financed by the financial services industry. They are run by a board that is appointed by the treasury, the board are responsible for overall policy decisions made by the FSA. With regard to the insurance industry in the United Kingdom, The FSA website have a section where by individuals can obtain details of any organization offering to sell home insurance uk products. The FSA register contains basic details of companies offering insurance products, such as contact details etc. With regard to the selling of insurance in the United Kingdom, the FSA have adopted a pro active stance off ensuring that consumers are treated fairly and that all necessary documentation is dispatched to the prospective policyholder, to ensure that they are able to make an informed choice as to the suitability of an insurance policy. Consumers are advised to check an individual companies authority to offer insurance contracts by visiting the FSA website prior to any purchase being made. Providers of insurance contracts are obliged to supply consumers with various documentation at various stages off the insurance sale process, providing them with information outlining, who the actual insurance provider will be, how to make a claim, how to make a complaint, and statutory rights with regard to cancellation off cover etc. Any company that has also received permission from the FSA to handle client monies, has to have made certain provisions to safeguard client funds.   As mentioned above, there are various sectors of the UK insurance market, all performing roles, which may seem a little confusing. In essence, there are companies that sell insurance on behalf of others ( Brokers, Intermediates and Aggregators who receive a commission from the company whose product they sell, and may also charge a fee to the person buying the cover) ) and other companies that actually provide insurance ( Take risk and pay claims). Some other companies only promote their own products on a " Direct" basis. This type of direct setting has proved to be most popular, with consumers led to believe that by buying direct from an insurance provider, cheaper premiums may be obtained. However, with the rise in the last few years of the Internet and the so called " Insurance Aggregator" using the services of a company that promote the products of various product providers has again become the preferred choice of many people for sourcing insurance products.   Traditionally, the term market, referred to a place where people bought and sold goods and this can equally apply to services such as the buying and selling off home insurance uk products. Purchasers of home insurance can be individuals or companies, although most residential home insurance uk purchasers, tend to be individuals satisfying the terms & conditions of a mortgage.   The companies that offer insurance may be, proprietary companies, societies, and mutual associations, or Lloyds underwriters. Insurance may be bought directly from companies, as mentioned above, but still today in the United Kingdom, most home insurances is arranged through intermediaries.. Intermediaries brokers and agents act on behalf of their clients, but are usually paid in the form of a commission by the insurance company. It is fairly typical, an intermediary broker or agent to also charge a fee to the client. Fees for arranging home insurance uk vary from company to company but are not usually high. Any fee charged for arranging home insurance , should be disclosed on the insurers or brokers documentation.   The Risk Takers... Proprietary Insurance Companies - the first insurance companies were created by a Royal charter. Most of these companies have now long since merged with others, and historic names such as Royal Exchange Assurance created in 1720 have now in long since disappeared. Most insurance companies are created under the companies act, proprietary companies are owned by the shareholders, whose liability for losses is restricted to the nominal value of their shares. these companies provide insurance, take premiums and pay claims. They have fairly complex mechanisms in place to ensure that their liabilities, do not exceed their income. Lloyds of London - Lloyd's of London, is probably the world's best-known insurance market, operating from its iconic building in the city of London. However, amongst consumers the structure of Lloyds is little understood. Lloyd's is not an insurance company but consists of a society of members, both corporate and individual who underwrite insurance risks in syndicates. The syndicate's employee professional underwriters who accept risks on behalf of the above. There are in the region of 46 Managing Agents and 75 Syndicates at Lloyd's of London, which whilst mainly known for its more complex insurance contracts, Lloyds underwriters do provide large amounts of capacity for simply home insurance policies . Many brokers will have direct dealing facilities with Lloyd's of London, enabling them to transact business without prior presentation of the risk to the underwriter. Who Sells the Products? Intermediaries & Brokers - there are a variety of titles for companies and individuals that sell insurance products on behalf of other companies. Until the repeal of the insurance brokers registration act 1977, only certain companies or individuals were allowed to use the title insurance broker. Now, the choice of title is one of personal choice. Some companies, prefer to call themselves intermediaries, some prefer the title "consultant" Some still use the title "insurance brokers", whilst others are simply known as "agents". In essence, they are all providing a similar service in that they sell products on behalf of other companies in return for a commission and perhaps a fee. What they can and cannot sell you and what type of advice they can provide you with, can be vastly different. Some will offer you a broad range of contracts from a large panel of insurers, whilst others may only be able to offer a nominal choice with no " opinion". The FSA have put in to place certain mechanisms which ensure that a consumer, via documents supplied by the seller, is informed as to the type of service he or she can expect to receive. The FSA requires the sellers of insurance, to notify the customer on what basis they are making a recommendation of a certain product. The broker or intermediary can state that they have researched the market and in their opinion, the product on offer is the best one for the customers needs. However, some intermediaries or agents with limited market sources, can sell products on a "no advice or opinion" basis. This doesn't mean these type of products are inferior or more expensive, it simply means that the seller has not compared them to other products, so can not make any claims over and above the fact that the product is suitable for your needs. Most insurance brokers have access to a number of insurance product providers and contracts and will use computer systems linked to their product providers to obtain insurance quotations. Some brokers or intermediaries that are able to transact, large volumes of home insurance business, on behalf of an insurance company or Lloyd's of London, have their own facilities and can issue policies on behalf of insurers and even, up to a certain point, settle claims. Whilst a number of these traditional Intermediates or Brokers have migrated to the Internet, there are still a large number located in Uk towns and cities where customers can call in and speak to someone directly and buy insurance over the counter.   Direct Sales - probably the best known of the "Direct Sale" Insurance companies, is Direct Line, they pioneered a major change in the UK insurance industry and brought about the perception that by cutting out the "middle man" you could save money on insurance. Direct insurance companies market their own products only, by using a number of advertising mediums including, Television Advertising & The Internet. Insurance Aggregator - the term "Insurance aggregator" is a relatively new one in the United Kingdom and has mainly come about by the development of Internet technology allowing insurance quotations to be provided online. The insurance aggregator, will use sophisticated data scraping tools to obtain quotations from its partner companies. These can include insurance companies and insurance brokers selling products on behalf of other companies. In the early days, the premiums obtained from insurance aggregators used to be fairly inaccurate and could only be used as a guideline. However, as time passes these aggregator websites are becoming more sophisticated and the quotations they obtain from their partner companies are becoming more accurate.  Aggregator companies receive a commission from their partners when a policy is sold, however they may also charge a fee to their product providers based on the number of quotations sent to them based on click through. The insurance aggregator, is seen by many as a modern form of insurance broker and it is really left to the individual to form an opinion as to the quality of the service provided. Whilst some consumers will like the anonymity of being able to buy certain insurance products online without much human interaction, some still prefer the personal touch of dealing with an insurance broker or intermediary to arrange their home insurance policy. back to top Copyright Assetsure Limited 2008