Home insurance: pay less by being better insured, it’s possible!

In April, many multi-risk home insurance contracts expire. It’s time to play the competition and check that your guarantees are still well suited to your needs.

April 1 is, along with January 1, a key moment for a large number of multi-risk home insurance policies which are automatically renewed for the next twelve months. How long has it been since you looked in detail at the guarantees in your contract?

However, any change in situation, however trivial, involves updating the specific conditions of your contract: your boyfriend is moving in with you or your children have left the family nest? Have you changed your furniture? Have you built a conservatory? etc

Failing to update your contract, you risk unnecessarily overpaying an insurance premium to cover a risk that no longer exists or, worse, you expose yourself to a challenge to your compensation in the event of a claim.

Here are a few concrete cases under the magnifying glass of the Income.

– Your adult child definitely leaves the family nest. This is clearly a reduction in risk since your child is no longer insured as entitled to compulsory civil liability under your home insurance contract. Same situation if a spouse leaves the marital home after a separation. By declaring this change, you should see a reduction of a few euros in your contribution.

Conversely, when, for example, a boyfriend moves in permanently with his fiancée, the latter must report this to his insurer. It will be insured for civil liability, but also against theft. Indeed, in the opposite case, if it happened that the latter had personal belongings stolen from the home, he could not be compensated.

Good to know : people hosting Ukrainian refugees must declare them to their insurer so that they can benefit – free of charge (the insurance premium does not increase) – from civil liability insurance. This facility has been set up by all the French insurers who have been members of the France Assureurs federation since the start of the Ukrainian-Russian war.

– Your furniture and household appliances are no longer young. A few years ago, you may have taken out a “replacement value” option for your furniture. A cover that is not useless when you have invested several thousand euros in a fitted kitchen or a high-end leather living room. In the event of fire or water damage, the insurer generally reimburses you for the price you would have to pay to buy back the new equivalent. However, this optional guarantee expires after a few years. Check your contract and, if necessary, ask your insurer to no longer benefit from it. You will earn a few euros per year. Similarly, you can reassess the level of your “furniture capital” downwards depending on the age of your furniture.

Of course, conversely, if you equip yourself with new, top-of-the-range furniture, you should adapt the level of guarantee of the furniture capital of your contract.

– You adopt a dog. Do not forget to report it to your home insurer, possibly specifying its race. The declaration of your pet is necessary within the framework of your civil liability guarantee which is part of the multi-risk home insurance. The amount of the premium may be increased by a few euros, but you will avoid unpleasant surprises in the event of a dispute with a third party involving your dog.

– You have acquired collectibles. By inheritance or because you run the auction rooms, you have become the proud owner a collector’s painting, a listed work of art or an 18th century piece of furniture. Be careful, your home insurance is generally not enough, even if the ceiling of your movable capital is high. If the value of this object exceeds a certain amount (generally 20,000 euros), you will certainly have to take out specific “all-risk valuables” insurance.

On the other hand, a collection of less valuable objects (comics, vinyls, model cars, etc.) may be covered by your standard home insurance. Make an inventory by keeping your supporting documents (invoices, photos, etc.). If necessary, have it estimated in order to declare its value in the special conditions of your contract.

You have added a veranda, installed a swimming pool or a fireplace or converted your attic. If you have omitted to declare this development to your insurer and a loss occurs, the insurer may apply the “proportional premium rule” which will reduce the compensation. This article L113-9 of the Insurance Code penalizes the insured who has paid a contribution that is too low with regard to the real risk to be insured. Please note that this penalty may apply even if the inaccurate declaration has nothing to do with the claim. It nevertheless allows the insured to receive compensation, even reduced, for his claim.

The calculation of the proportional premium rule is as follows: amount of compensation = amount of damage assessed x (premium paid / premium due). Assume an annual contribution of 500 euros for a house with 4 main rooms. The owner had the attic converted, thus creating two new bedrooms, but did not think of declaring it to his insurer. However, for a house with 6 main rooms, its annual contribution should have been 600 euros. Following the start of a fire, the cost of repairing the damage is estimated at 20,000 euros. By applying the proportional premium rule, the insurer will only pay 20,000 x (500 / 600) = 16,666 euros instead of the 20,000 euros in compensation.

Our opinion : Review your home insurance contracts thoroughly regularly, at least every two to three years. You can update your home insurance contract at any time of the year: your insurer will send you an endorsement with the new specific conditions. Do the same for all your insurance contracts. For example, does a car over ten years old really need all-risk insurance? Life insurance is also concerned: thus, in the event of divorce, it is wise to update its beneficiary clause.

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