Ben Rawson-Jones, Tuesday May 20, 2008
Learn more about how to find the best home insurance deals and ease the financial burden of covering your property
The key to the right home insurance deal lies in keeping your head and not jumping at 'special offers' with seemingly large discounts. This can be a very bad move indeed.
Numerous providers are offering introductory offers for brand new customers only, including Sainsbury's Bank's 12 months of cover for the price of nine and Direct Line's promise of a third off plus an extra 10% reduction if you buy online. It all sounds great, but you may find better value deals elsewhere.
Compare the market
Special offers from from Sainsbury's Bank, Direct Line and Nationwide were recently put to the test by Moneysupermarket. The consumer website took a typical three-bed semi in Cardiff, Birmingham and Manchester and compared the annual premiums offered by the 'big three' of Sainsbury's, Direct Line and Nationwide with like-for-like deals from other home insurance companies.
Accidental damage cover, a five years no-claims discount, a £100 excess, a house alarm and window locks were included in each scenario to maximise the premium savings.
Cardiff featured a home with a market value of £170,000 and a rebuild value of £67,000. In this case the cheapest of the three providers mentioned earlier was Direct Line with a quote of £131.25 a year - significantly less expensive than the Sainsbury's Bank offer at £281.95 a year.
However, the cheapest deal overall was offered by broker Homequote Direct at just £104.25. In actual fact, the Direct Line deal didn't make the top ten. The Post Office, Budget, Bradford & Bingley and Yesinsurance.co.uk all offered significantly better savings.
In Birmingham, Homequote Direct again topped the table. It's annual premium was £107.81 on a house with a market value of £149,000 and a rebuild value of £69,000. The cheapest deal from the 'big three' was Direct Line's £150.15.
Finally, Manchester saw the biggest gap in savings between the big guns and the minnows. A house with a market value of £120,000 and a rebuild value of £69,000 could have the cheapest insurance from the Post Office at £157.05 - a gulf of almost £70 between Direct Line's £224.70 a year, again the best of the big three.
It is worth stating that the research by Moneysupermarket was limited and that Sainsbury's Bank, Direct Line and Nationwide could well be competitive in other areas. However, the results do illustrate the importance of shopping around.
Insurance premiums vary hugely depending on where you live and the type of property you live in so you need to compare a number of providers to ensure you are getting the best deal for your circumstances.
