Home insurance: Renewing your home insurance
Like car insurers, home insurers reserve their best deals for new customers meaning that loyal policyholders often find themselves paying more for in their second year of cover.
But how does home insurance renewal work? And how can you make sure you save money on your cover?
What is auto renewal and how does it work?
Like car insurers, many home insurers have auto-renewal clauses in their policies. This means that, unless you make it clear that you don’t want to renew, your cover will roll over automatically at the end of the policy.
Your insurer will provide you with a notice of renewal before you're signed up for another year. This is usually sent by post, outlining the full details of your new policy and the premium. The document will also explain how you can cancel and how long you have to change your mind. Most companies will contact you at least 21 days to leave before your policy is automatically renewed.
Will I be charged a renewal fee?
Renewal fees in the home insurance market are pretty rare but some companies will charge them. Hastings, for instance, charges £5. As always, read your policy document carefully to make sure you are not stung.
What is a pre-renewal deposit?
Some providers – notably Swinton – automatically take a deposit from you ahead of renewal in attempt to secure your business for another year.
The payment, usually one month’s premium, only applies to pay-monthly customers and is taken from your account a month before renewal. The amount is deducted from next year’s premium if you decide to stay on.
If you know you're coming up for renewal, check with your provider for pre-renewal deposits to avoid being caught off guard.
Can I cancel if my policy rolls over without me wanting it to?
You can cancel your policy but it will probably come at a cost. You'll have a 14-day cooling-off period once your policy has started and most insurers will let you cancel, only charging you for the cover you have used.
However, some providers will still charge a fee if you cancel in the first 14 days. For instance, Kwik Fit will charge you £30 if you cancel within the first 14 days, while Sheila’s Wheels levies a £20 fee. The charges can be higher if you are outside of the cooling-off period so make sure if you want to switch that you cancel your cover before it is renewed.
What is the best way to find a cheap alternative?
Eleven months into your policy is a good time to start looking for new cover. Follow our full tips to finding cheap home insurance. Once you have found a good price, you could either take out a new policy or use it as leverage to haggle down the premium quoted by your current provider.
If you don’t think you’ll remember to take action before renewal, RBS offers a home insurance policy where the premiums are fixed for three years, so is worth considering if the initial premium is competitive. Buying the policy does not lock you in for the full three years so you can still switch if you can find a better deal.
However, the cost of cover will still increase if you make a claim or if there is an increase in insurance premium tax so make sure, if this happens, you explore all possible alternatives at renewal.
Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.