10 ways to cut the cost of your home insurance

Esther Shaw / 18 September 2018

Home insurance costs can mount up, but with these 10 tips you may be able to lower them and save some money



If you own your own home, home insurance is essential to protect your building and its contents. Go without it, and you leaving yourself vulnerable to fires, flooding and burglary.

The good news is, many homeowners are saving money on their home insurance premiums, as various price cuts in the last six months are feeding through to lower bills.

This is according to new research by data analytics expert, Consumer Intelligence, which shows that average annual home insurance costs were virtually unchanged from a year ago at £132.

The bad news is, not everyone is benefiting, with people in some areas such as London and the East Midlands, for example, still seeing premiums increasing (Londoners pay the highest annual bills of £173 and are seeing increases of 5.2%, while prices are rising by 2.6% in the East Midlands). This may be down to crime rates and local incidents, such as the impact of bad weather.

Further research reveals that people with newer homes are also seeing costs go up, with homeowners of properties built after 2000 seeing annual price increases of 2.6% – while prices are rising for all homes built after 1970.

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IPT hikes could push costs up further

As a homeowner, you also need to be aware that further increases to insurance premium tax (IPT) could push up home insurance premiums.

IPT, which works in a similar way to VAT in that it’s added to the total price of insurance policies, has been hiked up by the Government from 6% to 12% over the past three years. There are now rumours it could go up to as much as 20% by the end of the decade.

Given that the cost of home cover could head upwards, it’s worth knowing some of the simple steps you can take to help bring costs down.


1 Improve security

Your insurer will base your premium on how secure your property is, so take steps to bolster security, such as installing approved locks on your doors and windows, fitting a burglar alarm, buying a safe and installing security lighting.

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2 Carry out measures to reduce damage

Take steps to prevent issues arising, such as installing smoke alarms, removing trees which are too close to your property, keeping gutters clear, and insulating your pipes properly (so they won’t freeze and burst in the winter). Also join your Neighbourhood Watch scheme. These could all help bring down the overall cost of your policy.

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3 Think about upping your excess

The excess is the amount you must pay in the event of a claim. A simple way to lower the cost of your home insurance premiums is by opting for a higher excess. But be sure you can still afford to pay the excess if you do need to claim on your policy.

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4 Don’t buy home insurance from your lender

While it’s compulsory to have buildings insurance in place if you have a mortgage, you are not obliged to take out cover from your lender. Do your research, as you can usually find a cheaper deal elsewhere.

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5 Bundle buildings and contents together

You should be able to get yourself a discount on the cost of home insurance by purchasing a “combined” policy that offers both buildings and contents together.

Find out about Saga Home Insurance

6 Buy online

You may be able to reduce the cost of your annual premium by purchasing your policy online.

How to shop online for hot deals

7 Don’t opt to pay via monthly payments

While paying your premium in monthly instalments over 12 months may make your insurance more affordable, this could work out more expensive. Insurers add interest to your monthly payments so you’ll end up pay more overall. Opt to pay it in one lump sum upfront instead.

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8 Build up a no-claims policy

Another good way to keep costs down is by paying for minor repairs yourself, rather than make a claim. That way, you can build up your no-claims discount, which should mean savings on your premium after five years or so.

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9 Cut out the frills

It can be tempting to add “extras”  to your basic package such as home emergency cover, accidental cover, legal expenses cover or increased garden cover. Keep costs down by only paying for the ones you really need. For example, if you love a bit of DIY, then adding accidental damage cover is a good idea, or if your garden is your pride and joy and you have lots of garden tools and garden furniture, then additional cover makes sense.

How to avoid a DIY disaster

10 Don’t over-insure

As a homeowner, it’s important to get sufficient cover limits for your buildings and contents, as if you underestimate the value of your possessions – or the cost of rebuilding your property – you could end up in a sticky situation if your cover falls short when you come to claim. That said, there’s no point getting too much and paying more than you need to.

With buildings insurance, you need to have enough to cover the cost of rebuilding the property (not its open market value). To work out how much cover you need, check out the Building Cost Information Service (BCIS) of the Royal Institution of Chartered Surveyors (RICS).

With contents insurance, the best approach is to go around your home room by room, adding up the value of all your belongings.

How to get the right amount of contents cover

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The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.