Unlike car insurance, home insurance is not compulsory by law. However, once you consider the cost of damages which could be caused by flood, fire, or burglary, it’s clear that investing in home insurance is a wise move.
There are two types of cover to consider when buying home insurance; Buildings Insurance and Contents Insurance. Alternatively, many providers also offer combined coverage for both. The notion of building and contents cover is pretty self explanatory, so what else do you need to know? Read through our handy guide below, to ensure you have got all bases covered.Buildings Insurance
As it suggests, Buildings Insurance covers the structure of your home. It will also cover fixtures and fittings such as windows, doors, fitted kitchens and bathroom suites. Most policies will also cover damage to outdoor structures such as sheds, gazebos, fences & gates but it does tend to vary and this is one detail you should scrutinize to guarantee that you have adequate cover. Lots of people make the mistake of insuring their house for the market value, rather than the cost of rebuilding the house (cost of materials, labour etc), which is often ends up being more expensive. You should also take into consideration the cost of you and your family living somewhere else, should the worse happen and you need to leave whilst works are carried out. If you have just bought your home, you should find the rebuild cost on the mortgage valuation. Otherwise there are numerous online calculators you can use. It’s important to get this valuation as accurate as possible – too high and you’ll be paying unnecessarily more, - too low and you won’t be fully covered should the worst happen.Typically, you should look for a policy which covers a full cost of rebuild/repair in the event of:
- Flood (if your property is in a high risk area)
- Storm damage/lightning
- Damage by other persons/vehicles
- Explosions (gas leaks etc)
- Plumbing failures
It’s recommended that you regularly review the cost of rebuilding your home. Aside from the cost changing over time, you may have made renovations which have increased the value. If you live in an unusual or listed property, it’s likely that you’ll have to enlist the help of a building surveyor to make the calculations for you.Contents Insurance
Whilst buildings insurance will have your structure, fixtures and fittings covered in the event of any disasters such as fire or flood, any of your possessions destroyed won’t be insured if you don’t have a policy for contents insurance.Typically contents insurance covers the following:
- Furniture, carpets, curtains
- Electrical equipment
- Records, DVDs, CDs et al
- Jewellery, clothing
- Household items; pots, pans, cutlery etc
- Ornaments, Antiques
The list is almost endless. As always you should check the specifics of each policy to avoid any nasty shocks in the event of a claim.A good policy will have the following eventualities covered:
- Flooding/Water damage
- Accidental damage
When looking to purchase a contents insurance policy, you’ll be asked to provide a valuation of your belongings. Many online companies and comparison websites offer calculators to help you with this, but the most accurate way is to make a detailed inventory of each room. It’s a common mistake for people to under insure their belongings – essentially you should be looking to cover the total cost of replacement.
Most insurers offer to types of policy for contents insurance; ‘indemnity’ and ‘new for old’Indemnity: Takes into account the wear and tear of any items which you claim for. Basically, any claims you make will not reflect the original value of any damaged goods, and therefore won’t cover replacement New for old: Quite simply, this type of policy cover the full value of any items needing replacing or repairing. Of course this is the better option of the two, but you will pay more for this type of policy due to the cost being greater to the provider.
At the end of the day it’s up to you to decide which type of policy suits you best. Is someone in the family particularly accident prone? Is your home particularly hard for burglars to get into, due to security precautions you’ve installed? Whilst it’s important to ensure you have adequate cover, you should also be careful not to be paying over the odds for your policy.Avoiding invalidated claims
It always best to be fully upfront and honest with the insurance company when taking out a policy; any reason to invalidate a claim will be taken and there are many pitfalls people fall prey to. Make sure you evaluate your contents and building accurately, and provide accurate information for any other details which are requested from you. Many providers will ask you to stipulate which types of lock your home has. It’s worth noting that claims have been known to be refused, due to the wrong type of lock being listed on the original application. Also if you make any changes to your locks during an existing policy, be sure to involve your broker and check that they are approved for your policy. Another reason claims are commonly invalidated is due to people not using their burglar alarm, when they’ve specified on their application that they have one. Also, be sure to lock up securely when leaving as signs of unforced entry is also likely to cause problems with any claim. Further to that, any unsecured tools in your garden (ladders, hammers, whatever) which are used to break into your house may also invalidate your policy. Many insurance policies stipulate that you can’t be away from your home for longer than 30 days, so remember to contact your insurance company if you intend to be away for longer.
Using your home as a place of business is not unusual. Just make sure you inform your provider if this applies to you as again, this may be used as a reason to refuse any claims against your policy.
Accidental damage often doesn’t cover any DIY or home improvement disasters, so be careful when planning any renovations, as this will be considered deliberate damage (as unintentional as it may be)
Finally, should you fall prey to a burglary, make sure you report the crime to the Police within 24 hours, as this will also be required for your claim to be valid.