Household Insurance with Mortgage Lender

horseykitty

I have just rang up my mortgage provider to get details for my tax return. I was shocked to discover that I am paying over £600 for my building and contents cover. I know compared to car insurance it is relatively cheap but I have just been on a comparison site and some companies are offering it for more than £300 less!
I took out cover when I got my mortgage - am I tied into keeping my insurance with them? Will I have to wait until my policy needs renewing before I can change? My mortgage is with the Nationwide.

I can't believe the amount of money I must have wasted over the past 10 or so years! It is something I've taken for granted and not checked - crafty of them really. Because it's paid with the mortgage it's not as obvious as something like the car insurance and I've not really given it any thought - more fool me. Hopefully the renewal date is soon and I can stop wasting money!

_Andy_

Nothing crafty about it - you could have shopped around - they're not going to do that for you.

Make sure the cheaper cover you've seen is comparable - i.e. you may well have full accidental damage cover on your existing insurance and the cheaper one you've seen doesn't, etc.

lisyloo

There are many options with household cover so as Andy says make sure you are getting what you need with the cheaper quotes for example the following things are often options

accidental damage - buildings
accidental damage - contents
Legal cover
personal possessions (watches, ports, camera outside the house)
bicycles
freezer cover
cash

As well as the cover included you need to look at the total limits and single item limits and the definitions (the definitions of valuables for example can vary greatly).

It's quite detailed so you cannot just look at two prices, you need to look in a lot more detail.

You do not have to stay with you current lender, but they may charge you an admin fee for going elsewhere. They may also charge you cancellation fees for cancelling part way through the year.
This doesn't mean it's best to stay. It might still be cheaper to cancel and pay the fees, but you need to work it out.

Quidcooffers some cashback (I got £120 from lloyds tsb) but as always you need to be aware that it isn't guaranteed (I've had 2 payout from lloyds - one for house and one for car).

One of the advanatges of staying with your lender is that sometimes they guarantee to cover your home even if THEY got the level of cover wrong (they asses it at valuation and increase it each year).
If you get your own policy and you undervalue your buildings and/or contents then it's YOUR responsibility.
So be aware that you will be taking some responsibility if you DIY.

Personally I find house insurance the most complicated because of
1) The difficulty in valuing your own contents.
2) All the options, definitions and cover levels.

To be honest I think most people don't understand it fully.