Should you always go for the cheapest insurance cover available?

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With insurance, as with most things in life, the general rule is the better the quality, the higher the cost.cheaper home insurance

Of course, this isn’t always the case and cheaper cover may prove perfectly adequate for your needs. You might be quite happy with  home insurance that includes only very basic cover for your possessions, for example, and which may have low claim limits, a high excess and no accidental damage or away from home cover.

More comprehensive cover usually costs more

On the whole, however, paying more (although not necessarily a huge amount more) means your cover will be more comprehensive, with a higher standard of customer service if you need to make a claim.

So what might you find in more expensive policies that you won’t in the bargain bucket variety? Here are a number of potential benefits of spending a little more.

The list isn’t exhaustive as policies can vary considerably; some elements may be offered in a cheaper policy, while others won’t be, depending on the provider and type of cover:

  • Higher single item claim limits – Cheaper policies often have single item claim limits of only £1,000 or less. With pricier policies this figure is more likely to be £5,000 to £10,000, or even more, ensuring most individual items you own are covered, such as expensive bicycles, jewellery or antiques.
  • Higher total claim limits – If your house was stripped bare by thieves, you wouldn’t want to find you’re under-insured and end up receiving less than your possessions are worth. More expensive policies have total claim limits that are often tens of thousands higher than their cheaper cousins.
  • You won’t be under-insured – As the above two points make clear, paying more for your cover usually means that you’re far less likely to be under-insuring your home and its contents, giving you total piece of mind.
  • Lower excess – The ‘excess’ is the first part of any claim which the policy holder has to pay. With the cheapest policies you might have to fork out as much as £500 in the event of a claim, making claiming pointless in many cases. If you pay more for your policy, this excess might be as little as £50.
  • Away from home cover – Better home insurance policies will include ‘away from home’ cover so that you’re insured for possessions being lost, stolen or damaged when you’re away from your property.
  • Accidental damage – People can be clumsy and expensive items such as hi-tech gadgets and glassware are easily broken; more expensive policies will include cover for accidental damage, whereas lower-cost policies won’t.
  • Greater level of buildings cover – Re-building a home if it were destroyed, perhaps by a fire or extreme weather conditions, can be expensive, especially if you have a property that’s listed or has unique features. Pricier cover means you could have re-build claim limits of up to £1million, or even more, whereas with a cheap policy it might only be fixed at £150,000.
  • Outbuildings – Even the cheapest insurance will usually cover some outbuildings, such as a garage (but often only if it’s attached to the main structure of a home). But if you want to be assured of total cover that includes all outbuildings, whether separate to the main building or not, such as barns, sheds and greenhouses, as well as all their contents, you’ll have to pay more.
  • Cash, and credit card fraud – Cheaper policies may not cover cash that is stolen or lost (punishing you for being daft enough to leave cash lying about in the first place!), or if your credit cards are used by thieves. More expensive cover should.
  • Specialist requirements – You might have an heirloom or piece of jewellery worth a great deal but which is so specialist that a cheaper provider might not be able to cover it, even if you pay extra on your policy. The providers which offer the best, and more expensive cover, should be able to.
  • Customer service and making a claim – With the costliest policies, you’ll find that claims proceed in a faster and smoother manner, with fewer hiccups along the way and a more personal level of service.
  • Emergency provision – Costly cover will quite often include a 24-hour number you can call to get instant help in emergencies. If you were flooded and your home was uninhabitable, for example, you would find your accommodation costs would be covered. Of if your boiler broke down in the middle of winter you’d be able to have it fixed on the same day.
  • Exclusions – You’ll generally find fewer exclusion clauses included with pricier policies, meaning that the circumstances under which you can claim are increased. For example, if you’ve told your insurer that you have a burglar alarm, under standard, cheaper policy cover you’ll be expected to switch it on every time you go out. With more expensive policies, this is often not the case.
  • Legal expenses – If you’re taken to court by a third party and sued for damages, solicitors and court costs are often covered by better policies.

Policy Expert

We have a real passion for making sure people get the cover that’s right for them. We’re driven by a desire to help you find not only the best value insurance, but the right insurance for your individual needs. For more information speak to one of our experts on 0203 014 9300 or email ask@policyexpert.co.uk

 

The views expressed here are solely those of the author and do not necessarily reflect the views of Policy Expert.