Home insurance is designed to cover the financial costs if your property or its contents are damaged or destroyed. There are two main types of home insurance; buildings and contents insurance but we explain more about how each type compares in our article, 'What are the different types of home insurance?'
If you have a home insurance policy that has recently been renewed or you have recently moved home you could be 'double insured', meaning your property is covered by more than one home insurance policy. In this article, we look at what double insuring is, whether it is a good idea to be double insured and what happens if you need to make a claim.
What is double insuring?
Double insuring is the process of having more than one insurance policy in your name for the same thing. For example, if you have taken out a new car or home insurance policy without realising that you still have an existing policy in place. In most cases, double insuring is not deliberate but it can end up being very costly paying for two insurance policies for the same product/asset, especially as it is likely that only one of the policies is ever likely to pay out.
Can you have more than one home insurance policy on your house?
Having two home insurance policies is legal but is not advisable if they have been taken out to cover the same thing, e.g both buildings insurance policies. If you have two home insurance policies for the same property but they are different types; one is buildings insurance and one is contents insurance, this is not classed as double insuring as each policy is insuring a different thing. Double insurance can be a problem, however, if you have two buildings or two contents insurance policies.
So whilst doubling up on your insurance policies is not illegal, it can cause a problem if you need to make a claim. Not only will it prove costly, as you are paying twice as much for the same insurance, but you'll only be able to claim once. It is worth bearing in mind that if you are doubling up on your insurance deliberately in an effort to benefit from a claim, it could be considered as fraud.
If there are two of the same types of policy in place it would be extremely rare to receive double the payout, due to something known as a 'contribution clause'. This is where insurance companies speak to each other in order to agree a contribution towards the total cost of the claim. In most cases, a contribution clause will ensure that claimants do not receive more than is necessary to cover the financial loss. Claiming on both policies can cause delays as it can take a while for the insurers to agree on the contribution amounts. In addition, each claim will be classed as a separate claim and you will need to declare it the next time that you take out an insurance policy which can result in your home insurance premiums increasing.
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Can you have two home insurance policies for separate homes?
If you have more than one property you can have a home insurance policy to cover each of the properties as the insurance is insuring different assets. Typically, you can purchase second home insurance but this needs to be in addition to the home insurance policies you have on your main residence. If the additional properties that you own are rental properties you can usually get specialist landlord insurance which covers claims that are usually associated with rental accommodation. You can also get specialist insurance for a holiday home property or if you own a property that is to be left unoccupied for long periods of time.
If you are in the process of buying a new property, before you move out of the old property you will need to arrange insurance for the new property once you have exchanged contracts as this is when you become legally responsible for the property. You should then cancel the home insurance policy on the old property as soon as you can, otherwise, you will be doubling up on insurance by paying for insurance on your old property.
How to avoid double insuring
It can be expensive if you are paying for more insurance policies than you need and it can cause problems at a later date if you need to make a claim. Below we share some ways that you can avoid being double insured:
- Opt out of auto-renewal - Some home insurance policies are set to automatically renew at the end of the policy. This is great if you are likely to forget to take out a new policy each year but can mean you are not always getting the best deal. It can also mean you end up double insured if you forget that you have an existing home insurance policy.
- Make a note of the renewal date - When taking out a home insurance policy you should make a note in the calendar as to when it is up for renewal, this will allow you to cancel any existing policies or start a new one.
- Use a budgeting app to highlight recurring payments - Another way to identify if you are doubled up on your insurance premiums is to download a budgeting app such as Emma or Money Dashboard. Connecting your accounts to these apps will group all of your recurring payments and will highlight if you are paying home insurance to more than one provider. Find out more in our article, 'The best budgeting apps in the UK'.
How to buy home insurance
If you need to take out a new home insurance policy, one of the easiest ways to search for the best deal is via a comparison site such as Quotezone*. Comparison sites allow you to compare multiple insurers at once to find the best and cheapest deal to insure your home. We have partnered with Quotezone* so that you can search and compare cheap quotes from over 40 UK home insurance providers. Not all comparison sites are whole of market, however, and you therefore could find a better deal elsewhere.
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