How lockdown can help to reduce your insurance bills

Insurance is yet another area of life disrupted by lockdown. Changes to the way we travel, commute and work affect our insurance requirements in unexpected ways.

As a result, there are a few savvy choices you could make that are likely to save thousands of pounds through lockdown and beyond. 

Louise O’Shea, chief executive of price comparison website Confused.com, spoke to The Mail on Sunday about her lockdown insurance tips.

Protect against lockdown mishaps for just £20

It is no surprise that households are making more claims for breakages and mishaps than usual. As we’re spending most of our time indoors, accidents are inevitably more likely to occur.

When buying home insurance, there is one option that can take the sting out of a spoiled carpet or television broken by restless home-schooled children. 

Most insurers allow you to buy accidental damage as an add-on, which would cover this type of mishap. You should also be able to add it to your policy if you are mid-way through it by contacting your insurer.

O’Shea says: ‘We’ve seen increasing numbers of people selecting accidental damage during lockdown. It adds around £15 or £20 to your annual premium, but covers wear and tear and the odd accident.’

Don’t tick box that says you use your home for business

As millions are currently working from home, it may seem logical to tick the option on home insurance applications to admit that you are using your home for business use. But doing this will needlessly push up bills for most people.

O’Shea says: ‘You only need to tick the box if you have moved business stock to your home or you are having client meetings there. If you are just doing your job from home due to lockdown, it’s probably not necessary.’

Rethink how many miles you are likely to drive

When applying for car insurance, you are usually asked to estimate how many miles you are likely to drive over the year. But since you are likely to spend more time at home in the coming months, you may want to put a lower estimate that usual.

In general, the lower the number of miles, the cheaper your policy. This is because the less time you spend on the road means less likelihood of an accident.

But a word of caution. After a point, this rule goes into reverse.

If you estimate a particularly low mileage, the price starts to rise because you are seen as a less experienced and therefore riskier driver.

O’Shea says: ‘Honesty is the best approach and you should always be as accurate as possible when completing insurance quotations.’

Get travel insurance with a Covid clause

Around 80 per cent of the travel insurers listed by Confused.com include a clause to cover cancellations due to Covid-19. It may cost a bit more, but it will be worth it if your holiday plans are disrupted.

O’Shea says: ‘The average travel premium for a single trip in December 2019 was £27.19 compared with £40.87 in December 2020. Customers want better-quality products and a higher level of cover.’

Lock in a good deal while premiums are low

Car and home insurance premiums have dropped during lockdown because people are less likely to claim. But O’Shea predicts the costs may start increasing due to new post-Brexit regulations which mean it could take longer, for example, for car parts to be imported into the UK. She suggests that now might be a ‘sweet spot’ for those renewing to lock in a good deal.