Buying Home Insurance From One Provider Could Prove Expensive
By Liz King
HOUSEHOLDS could be wasting hundreds of pounds a year by buying their buildings and contents insurance from the same provider, according to research from AA Insurance.
More than two-fifths of households could reduce their insurance bills by separating their buildings and contents policies when promotional discounts were taken into account. But that figure went up to nearly three-fifths when the promotional discounts were taken out of the equation.
Simon Douglas, director of AA Insurance, said: "Many insurers offer special discounts for buying a combined home and contents policy. But even when taking that into account, a surprising number of customers would be better off buying the policies from different insurers although using a broker enables the most cost-effective combination to be bought from a single source.
"This underlines the fact that even if you get a great price on buildings, the same insurer won't necessarily offer the best deal for contents - or vice versa."
It is always important to compare products on a like-for-like basis, and a worryingly high third of people take their building and contents insurance from their mortgage provider – which can prove to be an expensive mistake.
Mr Douglas said: "They would probably get a better deal if they bought their cover elsewhere. But the important thing is that they don't just allow their cover to lapse - recent suggestions that the recession has led up to a fifth of householders to cancel or not renew their cover is worrying, especially at a time when claims for both burglary and weather damage are increasing."
The study compared 25,000 insurance quotes for 750 ‘customers’ throughout the UK in April, May and June this year.
