Caravan Insurance

People on the lookout for cheap home insurance are being warned they should not pay attention to price alone when searching for the right deal.

A survey carried out by MoneyExpert.com found that British home and car insurance customers are receiving around £3.59 billion less than they claim for, the average home insurance shortfall amounting to £627 a year.

However, Tim Berry, a director at the website, said that it was "not necessarily the insurer's fault" if a homeowner's claim is not fully met.

In the hunt for cheap home insurance, he said that "many people" focus on the upfront price of a policy at the expense of identifying the right level of cover for their house and possessions.

He said that this "can be a false economy", while in the long run cheaper home insurance can be found by shopping around and comparing policies carefully.

"Taking some time to establish the level of cover you need as well as exactly what you are covered for and what you are not covered for is a worthwhile investment," he added.

"Customers rely on insurance to pay out when problems happen and it must be very painful financially not to receive the full amount claimed."

Although the price of home insurance is to a large extent defined by factors such as postcode and lifestyle, it is still possible to get a better deal by comparing the differences between policies.