Your home is your asset and protector. Just like insurance for your car and yourself, it needs protecting as well.
Ok, so it isn’t a legal requirement, but what if something happened, could you afford not to have insurance in place? To have a mortgage on a property, your lender will usually require you to have buildings insurance but contents insurance will be your choice. Home insurance can give you that peace of mind that if your property is damaged or destroyed it will be repaired or rebuilt, or if your much loved possessions are damaged or stolen you will be compensated for their loss.
So let’s run through some of the basics for home insurance. We’ll look at things like the different types of cover through to some tips of how to reduce your premiums and what you can do to protect your home.
What type of cover is there for me to choose from?
Home insurance is quite simply Buildings Insurance and Contents insurance. When taking out a policy, you don’t have to have both. You can take out both, or just have one or the other. Different scenarios can influence your decision. Let’s go through these in more detail:
When considering buildings insurance you need to firstly think “is it your building to insure?” By this we mean do you live in rented or a similar property, do you live in an apartment block where this may be covered by a service charge?
Before considering taking out buildings insurance, find this information out. You could end up paying for something you don’t need. Buildings insurance is simply covering the structure, fixtures and fittings, for example, ceilings, floors, roof, walls, door and windows and bathroom suites, and that is just to name a few.
It’s important to read your policy documents for a full list of what is covered, as some even cover outdoor structures. Comprehensive buildings insurance will cover the following: fire, storm damage, falling trees, gas (or similar) explosions, earthquakes, lightning strikes, damage from the outside caused by vandalism or a vehicle, plumbing and water damage. Again, read your policy documents for a full list of what your particular policy will cover, as many insurers can differ.
Statistically, there are around 2 million properties in the UK who are in a flood risk area so checking that your home insurance covers you for loss and damage would greatly benefit. This also goes for properties in an area of possible subsidence. However, something to keep in mind is that you could be facing a higher excess.
Contents insurance covers you for your household possessions in the event of loss, theft or damage.
Typically, items covered would be the likes of electrical goods, entertainment collections (DVDs and CDs), furniture, carpets, clothes, paintings. Some insurers offer accidental damage as a standard cover on policies, but in most cases, this is an extra that will be charged.
Extra cover for such things like jewellery, artwork, antiques and items such as personal computing items and equipment is available on most policies, as is cover for the personal possessions you take out if the home. Contents insurance is never compulsory.
It is your own preference if you want it or not. The question is, if something happened, could you afford to replace such items that cost you so much to purchase.
How would I know the amount to insure?
Let’s start at looking at buildings insurance. Typically, insuring your building means that if your building needed to be rebuilt, how much would this cost. It is not the current market value of your home. If you live in a particularly unusual home, or even a period property, you will need to ensure your cover is high enough to replace “like for like” when rebuilding your property.
It is important to remember, if you extend your property in anyway, you must inform your insurer of this update. You could end up with an underestimated value on your insurance cover. To work such a value out, the Association of British Insurers have an online calculator to give you some help and guidance.
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To put a value on your contents insurance can be a little more head work. Don’t make the mistake of underestimating. You’ll be surprised at how much things mounted up can cost. The most straightforward way to help you would be to make a list of items in the rooms of your property, even including outbuildings, and work out an estimated total worth of those items. There are items that you will need to consider as being “high risk” and may require specialist cover, which will come at an extra cost. Items like coin or stamp collections, expensive works of art, jewellery, computers or expensive audio-visual equipment.
How do I know what is the right deal for me?
Choosing home insurance in recent times has been made easy and simple. Insurers have realised that people don’t know the ins and outs of insurance, which is what the companies are there for. Finding the right deal for you can be based on a number of things:
- Be honest with your information – Insurers can’t offer you the best policy if you aren’t honest with your information about your home and contents. With insurance, trying to cut corners can mean expense and trouble in the long run.
- Consider what is best for you and your finances in the present day. Don’t over stretch your outgoings for a policy that may not be the right one for you. Shop around and see how you can save.
- We mentioned about underestimating, but also remember, it can be costly if you overestimate. We all know how valuable our possessions are to us, but the tatty old sofa you have had for 20 years may be worth its weight in gold to you, but for an insurance payout, it may not be, and you are paying a premium based on this. Consider what you are insuring and what value you are putting against each item.
- Cheapest does not always mean the best. Research the policy before taking it out, as well as thoroughly reading the small print. Sometimes it will pay to go for a policy that is that little bit more expensive.
- With any insurance policy, the higher the voluntary excess you opt for, the lower your premiums can be. So it’s something to consider. Of course, the consideration comes to setting a reasonable excess value that you will be able to afford in the event of if you needed to make a claim.
- Paying for your home insurance premium upfront will save you money. By opting to pay instalments will mean that you need to include the interest rates charged by some providers.
It’s always good to compare home insurance policies
In the current market, there are many companies offering good insurance deals, so it is hard to know where to start. It always makes sense to go online and compare prices from as many providers as possible.
Use our online quoting system to see what can be offered to you. You can also call our UK based contact centres on 0800 080 6376 (Lines are open Monday to Friday 10.00 AM – 4.00 PM excluding Bank Holidays) who can talk you through all levels of cover we offer.