Cover for your home
Insuring your home and the things in it
Home insurance is extremely important. Your home and its contents are likely to be the most valuable things you own and not just in terms of money.
There are two types of home insurance: building and contents. Some companies will offer a combined policy that covers both. If you own your home, you might have both. However, if your property is leasehold and you pay a management or maintenance fee, which may well include buildings cover, check with your management agent before you take out a new policy as you may already be covered.
The cost of insurance can vary enormously, so it's important to compare the details as well as the price to understand what you will get for your money. A policy may be cheaper because it excludes certain circumstances (such as flooding or subsidence), which you may wish to be covered for.
You should also check the excess - this is the amount you will have to pay towards the cost of a claim. You may get a cheaper policy by agreeing to pay a higher excess should you need to make a claim.
Buildings insurance
Its a condition of any mortgage that you have adequate buildings insurance, whether arranged by you or through the freeholder or managing agent if you live in a leasehold property. This is because they're lending you money on the basis that if you don't keep up the payment, they will have the right to sell your home to get their money back so if it was destroyed, they will lose their security.
You may be offered building insurance from your mortgage provider, but this may not be the best policy for you, so it pays to shop around.
What does it cover?
The basis of buildings cover and the figure that will be used to calculate how much you pay is not based on the value of your home as it stands, but on how much it would cost to rebuild it.
If your home is damaged or destroyed by fire, flooding or subsidence, your building insurance will generally cover the cost of repairs. However, some policies may exclude flood damage and subsidence, so check yours, especially if you think your home may be at risk.
It should also cover damage to fixtures and fittings like windows, doors, bathrooms and kitchens, and outbuildings like sheds and garages.
Cover can vary, so check what's covered before you agree to anything, use comparison websites to compare cover from different providers to find the right one for you. Be sure to compare the excesses of each policy, this will vary according to what you're claiming for.
At a glance:
- Provides cover for damage caused by fire, flooding and some accidental damage
- Protects fixtures and fittings
- Covers for damage caused by leaks, burst pipes or intrusion
Home contents insurance
Contents insurance is designed to cover the loss or damage to the things in your home, from furniture and appliances to personal possessions like jewellery and gadgets. There are different levels of cover, but in its most basic sense home contents should cover your belongings against damage or loss caused by fire and theft. Some policies also cover you for accidental damage.
We have more and more personal gadgets in our lives these days: mobile phones, digital cameras, mp3 players and gaming machines. These are not always covered by contents insurance, and if they are, they may only be covered while inside the home you might want to look for a provider that covers personal possessions outside of the home as well, or ask about adding this to your current policy. Alternatively you can look at personal possession cover by itself, or travel insurance, which will cover you when staying away from home.
Some policies offer new for old cover, this means that if something is lost, stolen or damaged beyond repair, they will offer you a brand new replacement, regardless of how old the item you're claiming for was. Check the excess, cheap policies may end up costing you much more if you need to make a claim.
At a glance:
- Covers you for loss or damage to the belongings in your home
- Protection against accidental damage for things like furniture and appliances
- May cover your personal possessions when you're away from home