We all want to protect our homes and the things in it. Burglaries, floods and fires are, sadly, facts of life. Whilst we can't insure ourselves against emotional loss and trauma, home insurance will ease the burden by helping us deal more easily with the financial aspects.
Home and contents insurance covers fire, theft, damage and loss, and sometimes personal liability cover to protect you against third party claims against you for injury or damage to another person's property. Depending on the premium you pay, you can insure your house and/or its contents for various levels of cover.
When you take out a mortgage, you will have to buy building insurance. The sum insured will be the full cost of rebuilding your property. Items insured will include the structure itself, permanent fixtures, interior decoration, and some external structures.
A good policy will pay for alternative accommodation for you and your family should your home be made uninhabitable. Some policies include emergency call out cover.
Contents insurance can cover everything from computers, TVs and jewellery, to garden plants and bikes. When valuing the items in your house, be realistic and accurate. If you have any particularly expensive items, you might want to take out separate insurance, after getting a professional valuation. Update the cover level every year to keep in line with inflating costs, add new items if necessary, and make sure that you always covered for the current and full value.
The better security you have in your home, the cheaper your insurance will be. Burglar alarms, CCTV, neighbourhood watch schemes, window locks and mortise locks can all help to reduce your premiums.
Some policies will include ‘new-for-old' cover, where stolen or damaged items will be replaced at the current price. Or you could take out ‘indemnity' insurance, for which your premiums will be less, where deductions are made for depreciation of the items. There will, however, be exclusions on your policy, generally relating to letting or unoccupancy, so always check these before you commit to anything.
Most policies will let you extend your contents cover to provide insurance against loss, theft or damage while the items are outside the home, useful for things like mobile phones, cameras or laptops. This will mean a slight increase in your premium. Additional extensions include liability insurance, legal expenses and freezer contents cover.
Most insurance will cover loss or damage due to:
- Fire
- Vandalism
- Flood
- Lightening
- Falling trees
- Oil or water leaks from pipes or storage tanks
- Theft
- Vehicle collisions
- Subsidence
- Earthquake
The cost of insurance varies around the country, as some areas are more susceptible than others to external factors such as bad weather, subsidence and theft. You will need to decide what ‘excess' you will pay, ie. how much you will contribute to the cost of a claim – this will affect your premium. Some insurers have a no-claims discount system.
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