Can you live without home insurance?

As the cost of living continues to rise, it may seem tempting to cut out anything that doesn’t appear to be absolutely essential. However, when it comes to cutting back on your household expenditure, home insurance should never be considered an optional extra.

The average household has seen their bills continue to rise, a trend that is showing no sign of slowing. British Gas recently announced an 18 per cent hike in gas and a 16 per cent increase in electricity prices; this is on top of the rise which occurred just eight months ago.

On average, a household’s dual fuel bill has increased by 50 per cent since 2007. Food prices are also spiralling upwards. The cost of many basic food staples is rising faster than it has for two years, with the Guardian reporting that a simple loaf of bread is costing 75 per cent more this April than it did last September.

Unfortunately, on top of all these increases, home insurance costs also rose by nine per cent in 2010, according to the AA. Although there are ways to bring these basic costs down (a broker, for example, can find you the cheapest possible deal on your insurance) insurance can still seem to some like a waste of money, particularly as many homeowners pay premiums for years without making a claim.

However, when you consider the alternative, it becomes clear that the cost of home insurance is worth it for the peace of mind that it allows; it’s an essential safety net.

Imagine being burgled and not having home insurance in place. When you consider that the average claim on house insurance after a burglary is £1,200 you realise that you could literally lose thousands of pounds of household goods that will need to be replaced.

These figures become even more worrying when you consider the fact that the amount of burglaries rose by 14 per cent last year, hitting a seven year high, according to The British Crime Survey.

Should the fabric of your home be damaged by fire, flood or other disaster then the cost could be far higher. You could literally lose everything that you have worked hard for over the years.

Research from Clydesdale and Yorkshire Bank shows that one in four households in the UK have no home contents insurance in place, and approximately one in three possess no buildings cover.

When you forfeit home insurance to save money you are playing a very risky game. Far preferable to living with the worry of becoming one of the 745,000 homes targeted by thieves annually in Britain is to focus on finding the best possible value home insurance to meet your needs.

Simple measures, such as having window locks fitted or joining your local neighbourhood watch group, could reduce your premiums, as could paying in a lump sum rather than splitting the cost between the 12 months of the year.

You should also take steps to reduce your other household bills by using utilities comparison websites to ensure that you are getting the best possible deal on your gas and electricity. By reducing your outgoings as much as possible, you will ensure that you have room in the budget for all of your essential household bills, including home insurance.

While it may seem tempting to save Pounds by scrimping on the house insurance, the potential cost of doing this is devastating. It’s a risk that is simply not worth taking, so make sure that you have good value home insurance in place to protect your property at all times.