Home insurance: Do you know what you are buying?
Home insurance is simple enough to buy now but do you really know what you are buying? Some of the terminology can be hard to understand or not know at all. Many people don’t know exactly what their home insurance policy covers, which can cause problems when making a claim, or even put people off making a claim.
Your home and possessions are usually the most expensive thing you will ever need to cover so it is important that your cover is right for your needs. You can buy this cover yourself but why not get some expert advice from your Ingard Adviser on this area of protection.
Here are some useful things to know:
Buildings Insurance
This relates to the structure of the house plus permanent fixtures and fittings that are part of the house such as kitchen units, toilets, sinks etc. Imagine taking the roof off the house and tipping upside down – whatever doesn’t fall out is generally considered “Buildings”.
Contents Insurance
This relates to the possessions that are easily moved and transported if you move house. Imagine taking the roof off the house and tipping upside down – whatever does fall out is generally considered “Contents”.
As well as the two main types of home insurance explained above, here are a few other things you should consider:
Rebuild Figure
Some insurers will cover your property up to a specified amount, others will ask for the rebuild value of your property. The rebuild cost is the amount it would cost to completely rebuild your home if it was destroyed beyond compare including the price of labour, cost of materials and removal of any existing materials. NB: The rebuild cost can be very different to the cost it would be to buy your home i.e. the market value.
Accidental Damage
Does your policy cover accidental damage? This means things like spilling paint on the carpet or a nail through a water pipe. Most insurers will charge extra for accidental damage cover, so you must opt for it specifically when you take out your policy.
Locks & Burglar Alarms
Your insurer will also want to know information about external locking doors and windows. NB: If you forget to set the alarm or lock the door and you are burgled, this may affect your claim. Did you know that most burglaries take place between 10AM and 3PM, not at night!
High Value Items
Most insurers will cover you for valuable items in the home but you may be asked to specify any expensive items, which usually means items worth over £1000. NB: Don’t forget to add items if you buy any new things that fall into this category.
Home Business
If you use your home as a business address you will need to declare that with your insurers as some may decline cover based on what your business is and if you have any visiting clients.
Listed Buildings
If you live in a listed building you will need to declare this when you take out your policy. This is mainly because the rebuild cost can be tricky to calculate – specialist craftsmen and materials may be required to restore the building to its original state.
Contents Outside of the Home (also known as Personal Possessions cover)
If you have any items you usually wear or take out of the home (watch, rings, glasses etc), you will need to request this cover. Similar to Valuables cover, if you have any items worth over £1000, you would need to specify these.
Excess
This is the fixed amount you have to pay if you make a claim. Your insurer will deduct this from any pay out they make. You can choose to increase the excess when you set up your policy and this should help to decrease the cost.
Holidays and travel
If you’re lucky enough to be going on a longer holiday than the norm, you need to check the unoccupancy period on your policy. If your property is left unoccupied for a significant stretch of time – usually 30 days or more – some insurers will not cover past this extended period. NB: Don’t advertise on social media that you are on holiday and your house will be empty!
DIY
Professional tradesmen will have their own insurance, but if you’re intent on ‘doing it yourself’ it’s worth checking your policy first. Accidental damage cover should offer you piece of mind for minor mishaps, but if you’re undertaking some major renovations, extending up or out, you need to check any cover restrictions on your policy.
Exclusions
Your insurance policy will always have a list of excluded items, so make sure you read your documents to ensure you’re covered. General wear and tear to your possessions won’t be covered, which may seem pretty obvious, but there may also be less obvious exclusions such as cyber-attacks or lost data.
Always read and familiarise yourself with your own insurance documentation. If you’re in any doubt, call your insurance company to check the details of your policy.
For more information and helpful hints, you can click here: https://www.assuranthomeinsurance.co.uk/useful-information/
Here to Help
Get in touch with our team of Mortgage and Protection Brokers to find out the best buildings and contents insurance deal. Call us on 01702 533 400 or arrange a call back.
This article was produced in partnership with Assurant.
Assurant Intermediary Ltd offers Mortgage Advisers in the UK a quoting platform (Quoforma+) to source home insurance products from across the market.
Part of Assurant (NYSE:AIZ), a global provider of risk management solutions, helping protect where people live and the goods they buy.
With approximately $32 billion in assets as of December 31, 2017 and $6 billion in 2017 revenue, Assurant operates in 16 countries, while its Assurant Foundation works to support and improve communities.