The Ins and Outs of Home Insurance

Life is a winding road full of curveballs that can come from all angles and at any time, and the key to coming out the other side unscathed is to ensure you’re prepared for anything. Insuring your home and its contents is just one of a multitude of ways you can cover your back should the worst happen and one of these curveballs comes your way, possibly in the form of a sudden flood or burglary.

But knowing where you stand with regards to home insurance can be a little disorienting, and yet it’s important to know the distinctions between the different types of insurance on offer in order for you to get the best cover for your home. Therefore, we’ve put together a handy guide on the ins and outs of home insurance so you know exactly what’s on offer, what to look for, and why you should definitely get it if you don’t have it already.

terraced new-build houses

Buildings Cover

The point of buildings cover is to insure the physical structure of your home and any permanent fixtures to or in your home, such as the kitchen or bathroom, by offering to pay out enough to rebuild your home in the event of it being damaged or destroyed. The cost of your premium therefore increases proportionally as the cost it would take to rebuild your home also goes up. It’s important to note that the rebuild cost of your home is not the same as the market value of your home; usually it is lower. Regularly checking to see if the rebuild cost of your home has changed, due to a shift in the cost of building materials for instance, is a good way to monitor your expenditure on your insurance so your insurer can adjust your premium accordingly.

You should ensure that your policy covers damages due to flood, fire, storms, subsidence, burst pipes, theft, or falling trees. Popular extra cover add-ons include accidental damage and legal expenses cover. However, you will need to look closely at the small print of your policy. Your policy may not cover your property in cases of wear and tear and war or terrorism, so this is something that you need to be aware of. Similarly, if you were to leave the property unoccupied for a period of 30 days or more in a year, you would likely void the agreement.

While it is not compulsory to have cover for your building to insure the contents within, that being a separate type of policy all to its own we will discuss in a second, mortgage providers often insist that you insure your property with buildings cover as a means of protecting their investment in both you and the property.

It follows that if you are a tenant in your property, it is not your responsibility to take out buildings cover on your property, that being something for your landlord to fret about. But you may want to take out something called contents cover.


Contents Cover

With this type of policy you will be insuring everything that isn’t bolted down in your home or integral to the property, including your TV, settees, beds, wardrobes, clothes, and everything else you may possess.

However, when taking out the policy, you will be required to give an estimate of the total value of all the items in your home, something that most people tend to underestimate. To combat this, it is a good idea to go round your home from room to room noting the value of everything you own in it. You don’t want to find out the hard way that your insurance doesn’t cover the value of everything you owned, so take care.

It is also very important that you read the small print of your policy. Cheaper policies may seem like a good way to go, but often with cheaper policies there will be a limit in place for the sum of a single item payout. Should you have to put in a claim, you may find that the full value of the item lost, damaged or stolen won’t be coming your way if the item was worth more than the limit for a single item, leaving you with a shortfall that you will unfortunately have to make up.

A cheaper option for those strapped for cash can come in the form of an indemnity policy, a policy that takes into account wear and tear when considering claims. Your cover will offer payouts for items as they are currently worth as opposed to their initial worth, and as most items depreciate in value this means that if your five year old telly was stolen, say, and it cost a grand new, you would likely only get a fraction of that price when you claim on your policy. The premium would then also go up.  

Many people, though, tend to go for the middle ground when it comes to contents cover, instead of the cheapest option which may not provide you with the cover you need. New For Old cover is one such upgrade we would recommend you take. These type of policies insure your possessions and offer payouts to allow you to buy brand new versions of your items, rather than simply offering you the depreciated, current value of your original item.

Why you should take out a policy today

You never know what might be just around the corner and it always pays to be prepared. Although your mortgage provider is likely to require that you take out cover, insuring both your property and its contents is not normally compulsory but is generally the wisest move, namely because it is the easiest way to ensure that you can cope with the financial consequences of any damage to your property and possessions or loss or theft of the latter.

The Insurance Store offer unbeatable home insurance policies from our base in the St Albans and Harpenden area. Whatever your insurance needs, we’re here to help. We pride ourselves on our ability to beat quotes given by price comparison websites and our professional team are excellent at seeking out the perfect package for your needs. So for friendly advice or a No Obligation Quote, contact our team today.