Knowing what type of building and contents insurance to purchase can be difficult. This guide is designed to answer some of the questions that people commonly have about home insurance. Hopefully, it will help you to find a policy that is perfectly suited to your needs.
Home insurance is possibly the most important type of insurance that you can buy; your house is after all likely to be your most valuable possession.
Home insurance will cover the cost of repairing, or even rebuilding, your home in the event of damage. It can also cover the cost of replacing the contents of your home should they be lost, damaged or stolen.
One of the first questions to ask, therefore, is whether you would like to purchase home insurance that covers your building, the contents of the building, or both.
Although it is perfectly feasible to purchase building and contents insurance from different insurers, having both types of insurance from the same insurer can help to simplify the claims process significantly.
Buildings and contents insurance usually protects your home against risks such as flood, fire and subsidence and your belongings against theft (some policies will cover accidental damage, this is something that you will need to check with your insurance provider). However, it’s worth remembering that you’ll need to look after your home and it’s contents because home insurance doesn’t cover general wear and tear.
Unlike, for example, car insurance, home insurance is not usually a legal requirement. The vast majority of mortgage lenders will, however, insist that you have building insurance, for obvious reasons.
There are a number of things to consider to ensure that you receive the right level of home insurance cover. If the policy that you are looking at purchasing is ‘sum insured’ you will have to first calculate the value of everything in your house, including the cost of rebuilding your home. This is because this type of policy will only provide a certain level of cover; if costs rise beyond this point you will not be covered.
Many companies, however, now offer home insurance that does not have this limit. This is useful as you don’t have to work out the amount that all your possessions and home, are worth. It also means that you don’t have to update this figure over time.
If you do select a ‘sum insured’ policy, you may wonder how you begin to estimate the cost of rebuilding your home. The Royal Institute of Chartered Surveyors has an extremely useful tool on its website that will help you to work out this figure; it is important to remember that it is usually significantly less than the market value of your property.
One last thing to think about, when selecting a home and contents insurance policy, is whether you own any special, valuable items such as works of art or jewellery. Most insurers will provide a set amount of cover for single items and a set limit for all of your valuables combined.
Any items that are particularly valuable need to be specified on your policy. If you own an item that is extremely valuable then you may need to take out a specialist home insurance policy.
Featured article from John Lewis Insurance.