Home Insurance

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For the majority of people a house is the most expensive and important thing that they will ever buy, so making sure it is safeguarded against any possible problems is essential. The last thing you want as a homeowner is to fork out on repairs and other costs involved in restoring your home back to to its original state in the event of a fire, burlary or natural disaster.

What is Home Insurance?

There are many different types of insurance for the home, from buildings cover to conetnts cover and at first they may seem confusing and difficult to dissect.

Home insurance is split into two main categories: Buildings insurance – those policies which cover the actual building you live in, and Contents insurance – those policies that cover the contents of your property.

It is usually a wise idea to shop around to ensure you get the best deal. Also be sure to let any potential insurers know all the details of your property, even if the policy may end up costing more. For example, not informing your insurer that you live in an area with a high flood risk may actually invalidate your policy so that in the event of flood damage to your home you may find yourself unable to make a claim.

Importance of home insurance

Every homeowner is recommended to have a buildings insurance policy, in fact in order to attain a mortgage most companies will insist that you have one, as this will ensure that sufficient compensation will be handed out to either rebuild your home to the same standard or repay the mortgage should the house be destroyed.

Buildings Insurance

Buildings insurance is household insurance that protects the basic structure and fabric of your home, such as the walls, roof and foundations. It is designed to provide you with financial aid to rebuild your home should it be damaged or totally destroyed through a number of situations, e.g. fire damage to your property. It also covers you against damage caused by events that are beyond your control, including:

Fire, smoke and explosions

• Burst pipes and other incidents of water leakage
• Vandalism or third party damage
• Subsidence
• Storm and flood damage

Apart from the basic structure of the house, the policy should also cover your windows, roofing, kitchen and bathroom, floors, electrical wiring and plumbing against damage caused by any of the listed events.

Buildings insurance quotes can be arranged over the phone or online and can be offered combined with contents insurance for ease and value. Some companies also offer a discount if a buildings insurance policy is purchased online or if you purchase your building and contents insurance as a combination.

Insurance providers differ in terms of policies offered, so make sure you compare a range of deals from different insurers and always remember to read the small print! If you do not feel 100% sure about understanding the terms, always ask the insurer directly or ask your solicitor to explain the policy plan to you.

Contents Insurance

Contents insurance works by protecting your belongings and possessions that are not part of the fabric of your house, e.g; inside the home. If you had a burglary, which resulted in any of these items being stolen, or you suffered a fire or flood, your contents insurance would pay to help you replace your lost, damaged or destroyed belongings.

Included in the contents policy will usually be anything that is not a fixed part of your home: computers, TV, HI FI and other electrical appliances, along with clothes, jewellery and furniture.

Your insurer will usually ask you a series of questions in order to determine your premium, which may include: your current employment details, your past claims record and questions regarding your occupancy at the property – whether you are there in the daytime or out of the country for six months at a time can have a big impact on the cost of your policy.

Remember, insurance companies are businesses and their main aim is to make a profit, so they will generally try to minimise the amount of money they pay out. This can be achieved by checking to see if you have disclosed any false information to them, which would give them the right not to compensate you for your losses.

Cost of home insurance

When it comes to determining the cost of your premium there are a number of factors that need to be taken into consideration.

These include:

• Postcodes – play a major part in household insurance premiums. The cost of household insurance varies by more than 300%, depending on the area in which you live.
• Social trends – these can have a negative or positive affect on your premiums, for example several years of high aggregate national claims levels can result in higher general levels of premiums.
• Security – If you don’t have any type of security installed at your home then you can expect to pay higher premiums, as your house will be deemed as being at a higher risk of thefts and burglaries. Some insurance companies can have their own unique requirements as to the type of security system that need to be installed, so find out more before proceeding. In addition to burglar alarms, fitting locks to your windows and doors is also recommended.
• Area of residence – Living in what is deemed as a high-risk area will increase the cost of your insurance. Some companies may require you to have a security system installed or to become part of a neighbourhood watch scheme in order to get any insurance at all, let alone a discount.
• No Claims Discount – If you have had household insurance in the past and have not made a claim, make sure that the insurance company are aware of this. As with car insurance, no claims discounts increase with time. Five years without a claim could result in you paying anything up to 20 or 30% less than a first time insurer.

Home insurance cover levels

When taking out insurance on your home it is important to have a policy that meets all of your requirements. However, do not take out more than what is needed as extra costs will build rapidly. The level of cover will differ depending on the inclusion of the following in your policy:

• Burglars & Security
• Fire
• Subsidence
• Frozen Pipes
• Extensions
• Storms & Flooding
• Holiday Homes

Finally, remember to review your buildings and contents insurance frequently, making sure it is kept up to date with any alterations made to the house or any major purchases. You may struggle to recover any money when making a claim if you fail to keep your insurance company updated.