MONEY TALK By Jane Milne Head of Household and Property Insurance, Association of British Insurers

Jane Milne explains how to save money on your home insurance

Things you want to protect in your life do not come much bigger than your home and your possessions.

Your biggest single purchase and your greatest financial commitment is likely to be your home, so it makes sense to protect your bricks and mortar and what is inside against the worst.

From fire to flood, storm to subsidence, loss of possessions to legal liabilities, you cannot afford to cut corners when it comes to safeguarding your home and its contents.

Reducing the risk of fire, flood damage and burglary can mean cheaper insurance

While household insurance should be a "must have", you can maximise your protection and minimise your costs by taking some simple precautionary measures.

Getting the best deal

The most important thing is to get the right level of cover in the first place.

It is a false economy to go for the cheapest policy at the expense of the full cover you need.

While most buildings and contents policies will cover the same "core" risks, terms and conditions will vary, so start by assessing the risks you want to protect against.

A local insurance broker can help to assess your needs.

For example, the level of alternative accommodation costs that will be paid will vary between policies.

This can be very important if you suffer a flood or serious fire, when you may be out of your home for a number of months.

Reducing risks

Since premiums are based on risk, reducing the risk of fire, flood damage and burglary can mean cheaper insurance.

Some straightforward measures you can take against fire and burglary loss include:

• Fit approved locks to doors and windows. The level of security will depend on the type of doors and windows, so talk to insurers first. Do not forget that in some cases (such as if you live in an area with a high crime rate) insurers will require a prescribed level of security to be installed before they can consider offering cover.
• Intruder alarms. Installing an approved alarm can typically reduce your premium by between 5-15%.
• Occupancy. Reflecting the fact that most burglaries occur during the day some companies may quote cheaper premiums if someone is usually at home during the day.
• Fit a smoke alarm. With the costs of domestic fires rising, some insurers may offer cheaper premiums on both buildings and contents policies if you fit smoke detectors.

Reducing flood damage risks

If you are one of the two million homeowners whose home is vulnerable to flooding, taking steps to reduce the risk of flooding, or the cost of damage if it does occur, can make house insurance more readily available and possibly cheaper.

If your home is particularly vulnerable you should consider:

• Replacing timber floors with concrete and cover with tiles;
• replace chipboard/MDF kitchen and bathroom units with plastic equivalents;
• replace gypsum plaster with more water-resistant material, such as lime plaster
• move electrical points well above the likely flood level.

Remember that these changes will usually pay for themselves by the reduced damage, often from a single flood.

Many insurers insist that window locks are fitted

You should speak to your insurer or broker before taking on these more costly projects to assess their benefit to you.

Shop around

Household insurance is a competitive market, with the cost of both buildings and contents insurance varying between insurers.

You can buy policies from your mortgage provider, bank, and an insurance broker. Even some supermarkets are getting in on the act.

The average cost of a buildings insurance policy stands at �209, and has risen by only 2% over the past ten years.

The average cost of contents insurance is �152 and has risen by 5% over the same period - still a very modest increase in view of the cover provided and amounts which insurers pay out.