Never too late to cover up

Burglars are busy - it's a good time to review your home contents cover

Among the many people who will be working hard this festive season are Britain's burglars. Christmas is a peak time for house robberies, as homes throughout the country are deserted by families off to visit relatives for a few days. Many make matters worse by leaving behind a tempting pile of newly-unwrapped presents where they can easily be spotted by anyone peering through the front window.

Among the many people who will be working hard this festive season are Britain's burglars. Christmas is a peak time for house robberies, as homes throughout the country are deserted by families off to visit relatives for a few days. Many make matters worse by leaving behind a tempting pile of newly-unwrapped presents where they can easily be spotted by anyone peering through the front window.

The effect of this shows through in both the number and the value of home contents insurance claims which follow every January. Figures from the Association of British Insurers show there were about 41,000 burglary claims in December 1997, resulting in payouts totalling some £42m. In January 1998, the number of claims shot up to 46,000 and their total value to £48m.

ABI spokesman Malcolm Tarling says: "There is an increase in theft connected with Christmas. The average theft claim is around £1,000, compared to £750 for the rest of the year. Thieves will be aware that many households are going to have some expensive Christmas presents."

The Yuletide celebrations are also rife with opportunities for damaging your property. Every December, leaking Christmas tree holders leave indelible stains on living room carpets and ancient fairy lights burst into flames. Home Office statistics for 1998 reveal there were 11 extra domestic fires every day in December, and 18 extra domestic fires every day in January, over and above the average annual 191 a day.

So, whether yours is one of the 25 per cent of British homes with no contents insurance, whether your current sum insured is too small to cover little Johnny's new computer, or whether you simply suspect you're paying too much in premiums at the moment, now might be a good time to put matters right.

Many of us assume shopping around for the best insurance deal would be pointless, as competitive pressures must surely mean all the rival policies are more or less identical. But Philip Telford of the Consumers Association warns that this is not the case.

Telford says: "There are some quite big differences in premiums. If you were making marginal savings then it probably wouldn't be worth the effort of shopping around. But if you're going to halve your premium - that is going to make a significant difference."

In its latest survey of home contents insurance, Which? magazine found wide variations in premiums for exactly the same cover. A low-risk customer aged 40, for example, could pay as little as £30 or as much as £101 for the same cover. For high-risk customers of the same age, Which? collected quotes as low £99 and as high as £403 for the same cover.

Discrepancies like this arise partly because many insurers cherry-pick only the lowest-risk clients in order to keep their claims low and their mass market premiums as competitive as possible.

Telford says: "When an insurer advertises a particularly good deal, that cover is only available at that price for certain people. It doesn't mean the company is cheap across the board. If you happen to fall into their preferred list of customers, you may get a very good deal. If you don't, you might get a very bad deal."

One thing which often results in a bad deal is buying your contents insurance as a compulsory addition to your mortgage. Mortgage lenders pull in business by keeping their loan rates at rock bottom, but often make up for the lost profits by charging customers extra for the home contents insurance they must also buy.

Simon Tyler of independent advisers Chase de Vere Mortgage Management says: "Many of the compulsory products are quite expensive, because they combine buildings and contents in most cases. It's not always the case that they're wrong, but you should be wary of them. If you don't want to take the insurance, then don't take the mortgage."

Insurers insist they will not turn away even the highest-risk customers. Instead, they make the cover they are prepared to offer people in certain postcodes so expensive that buying it is no longer a realistic prospect.

Launching the Office of Fair Trading's report on financial exclusion earlier this year, OFT director general John Bridgeman warned: "Those who live in areas of high crime - who tend to be those on lower incomes and tenants - are frequently faced with unaffordably high premiums."

Harriet Hall of the National Consumer Council says: "People are excluded because they live in risky areas and the premiums are too high to pay. Nobody does leafleting of council estates saying 'take our home insurance'. Companies aren't really interested in having them as customers anyway"

If you are not satisfied with the premium quoted next time a renewal notice lands on your doormat, the first step is to call a couple of direct insurers for some rival quotes. These telephone insurers have lower overheads and so will often offer the cheapest rates.

Finally, find a local insurance broker in Yellow Pages, and ask for details of the best deal he can offer. Even if the broker you chose cannot better one of the direct rates you have already been quoted, at least that confirms the deal you have found is hard to beat.