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Insurance Guide
Home Insurance is one of those necessary things of being
a homeowner. Whilst it is necessary there are some myths that
should be dispelled.
• MYTH - You have to have both Buildings
Insurance and Contents Insurance – this is simple not so.
The only real requirement is for you to have Buildings Insurance
as this will typically insurance the actual building from
damage.
Buildings Insurance
Buildings Insurance typically insures the fabric and infrastructure
of your property, this often includes bathroom and kitchen
fittings. Buildings Insurance cover usually insures your property
against unforeseen events, such as flood or fire and subsidence.
If you are buying a new property then is vitally important
that you have an adequate Buildings Insurance policy in place
at the time you exchange contracts on your property – do not
leave it until completion because at Exchange of Contracts,
the property is now your responsibility. If you are buying
a flat, often the Buildings Insurance is part of the Service
Charge, but always check to be sure. Also check the amount
of cover is adequate and the premiums are paid up to date.
• Contents Insurance on the other hand insures the actual
contents and personal possessions of you home.
Contents Insurance
Contents Insurance typical insures the contents and possessions
of your home, such as furniture, carpets, personal possessions
etc.
Contents Insurance policies can differ widely with regard
the amount of cover and what they actually cover, and so too
can the price. This is why you should choose a policy which
gives you a good combination of price and cover. As with Buildings
Insurance compromise on price, not quality of cover. Most
Contents Insurance polices set a maximum amount of cover for
instance £35,000. You should be aware of this and ensure this
amount is adequate to cover all your Contents.
Before you take out a Contents Insurance policy go from room
to room in your home and make a list of such things as hi-fi’s,
Televisions, jewellery, carpets, furnishings, furniture, sports
equipment etc.. It is surprising how much these things can
had up to if you needed to replace every item. Some Contents
Insurance also insure items that you take out of your home
such as bicycles, golf clubs but you should check with your
insurance company with regard what is and what isn’t covered.
An additional feature of most Contents Insurance is Accidental
Damage cover. This protects your contents against accident
such as spillages on carpets, the knocking over your Television.
There is usually an extra cost for this cover but it is very
prudent to take out this insurance cover.
Quite often your premiums on both Buildings Insurance and
Contents Insurance can be reduced by you agreeing to cover
the first part of any claim. This is typically called an Excess.
For Buildings Insurance this Excess is sometimes around £1000
and for Contents Insurance this Excess is sometimes around
£100. Therefore if you make a claim under your Buildings Insurance
policy you would pay the first £1000 of the claim.
• MYTH - You have to buy Home Insurance through
your mortgage lender – If you have a mortgage in your property
the lender will insist that you have adequate Buildings Insurance.
This is to ensure that their loan is protected if anything
happens to your property such as damage of subsidence. What
is a myth though is that you have to take your Buildings Insurance
through you mortgage lender. This is just not the case. Shop
around ensure you get the best quote and cover, compromise
on price, not quality of cover.
If you are shopping for a new mortgage quite often the mortgage
lender will include home insurance as part of the mortgage
quote. While this may seem convenient, again shop around.
Even if the insurance policy seems cheap, it may be subsidised
by paying a higher rate of interest on your mortgage.
Buying a Flat
If I am buying a flat the Home Insurance is included in the
Service Charge – always check this. Quite often this is so
but you should always check the insurance policy before you
purchase to ensure the policy is up to date and that you have
adequate insurance cover. Please also note that it is very
unlikely that any policy will include Contents Insurance so
you may have to buy this separately.
When Buying a New Buidings and Contents Policy - questions
When you are buying a new Buildings Insurance and Contents
Insurance policy you will typically be asked a number of questions
such as:
The Construction of your Property – This means is your
home built of standard materials such as bricks or stone and
that the roof is made of slate or tiles. If your property
is not built of these standard materials (e.g. concrete construction
or thatched roof) your property will be classed non-standard
construction and as such your insurance company may refuse
to insure the property of the premiums may be a lot higher
than you anticipated. In these circumstances it may be wise
to shop around for a specialist home insurance provider.
The Rebuilding Cost – The insurance company needs to know
how much it would cost to re-build your home in the event
of a catastrophic event. If you have purchased your home recently
then you survey should state the Rebuilding Cost of the property.
f you have owned your property for a long time and have not
had a recent survey then you might consider having one done
to ascertain an accurate Rebuilding Cost. Some Buildings Insurance
polices but a limited on the Rebuilding Cost such as £250,000.
You must ensure this is an adequate amount of cover for your
home.
Property Postcode – Your postcode tells the insurance
company a lot about your property and the area in which you
live. It gives an indication to the insurance company whether
it is prone to flooding or subsidence and whether the neighbourhood
has a high crime rate.
Any Previous Claims that you have made – Your insurance
company will want to know if you have made any previous insurance
claims, typically within the last five years. If you have
then this may adversely effect the premiums charged. If you
have made no claims then you may be entitle to a no-claims
discount.
Previous Criminal Convictions – You may also be asked
whether yourself or any member of your household has been
convicted of any criminal offences, although they typically
discount driving convictions such as speeding.
We have also produced a useful Landlords
Insurance Guide- click to view.
However if you are ready to get your Home
Insurance Quote, simply click the Icon Below
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