The cost-of-living crisis is squeezing household budgets and making it increasingly difficult to avoid, even for the best-off households.

This is because costs such as energy to power our homes and fuel to make our cars go are essentially unavoidable. A few scrimps here and there can be made, but ultimately, we have to use electricity and have to drive to work, or kids to school.

There is one area of personal finance however where you can still make some significant cost savings – insurance.

Insurance is an important aspect of our personal finances because it enables us to carry out tasks, activities and life in general, safe in the knowledge we’re protected from loss.

But making sure you’ve got a good deal, and the right cover, from your insurance provider is essential – with many people paying well over the odds for their policies.

There are some basic tenets to insurance that you should always have in mind to cut your costs:

  1. Shop around at renewal time. When you get your renewal letter or email through, don’t just take the price at face value. Although ‘loyalty penalties’ – where insurers hike your premiums year-on-year are now largely forbidden, you could still get better prices elsewhere.

You should also shop around if buying for the first time and not just accept the first quote you see. Price comparison websites are a great starting place, but going direct to different well-known companies is a good idea too.

  1. Don’t pay for insurance you don’t need. It might seem like a good idea to get mobile phone insurance when you rake out a contract on a glossy new iPhone, but do you really need it? Most home insurance policies will cover such items, just check your cover levels and adjust accordingly. The same goes for expensive extended warranties.

Travel and mobile insurance are frequently offered as part of current account packages too, making buying it separately unnecessary. You might even consider switching your account to save the money on a policy.

  1. Provide the right information. This is a crucial issue when it comes to insurance. If you’ve got an expensive camera, laptop or other item which might not be covered under standard home insurance amounts, then make sure it is stipulated on the policy.

Likewise with car insurance, making sure the information about you such as job title and years driving are right, can make a significant difference. Insurers will treat some job titles very differently from a risk perspective. This isn’t to say you should lie for a ‘better’ job title, but be honest and careful.

When it comes to policies such as life, health and protection insurance it is also really important to be honest with your disclosures. Getting something wrong or being flexible with the truth could diminish pay-outs and even invalidate a policy completely.

  1. Invest to bring your premiums down. This tip is somewhat counterintuitive and shouldn’t be considered as a ‘quick’ cost cutting measure, but insurance on the whole is a financial expression of risk and the potential cost of loss. You can reduce the cost of this risk by reducing the actual risk itself.

But what does that mean in practice? When it comes to home insurance, it means getting better quality locks, installing a burglar alarm or other home security networks. This will bring your premiums down, but requires an outlay. It should however pay for itself over time.

The same is true in other areas. For life insurance, health insurance and income protection, living a better lifestyle will bring your premiums down. This includes losing weight, exercising more and quitting habits such as smoking. Fortunately this can be done for free but it requires time, and sometimes emotional investment.

And for something such as car insurance, having a policy which includes a ‘black box’ tracker or telematics can bring your premiums down significantly. The investment here being a commitment to driving in the most responsible way possible!