Your house and your personal belongings are usually the largest part of your total assets. Therefore one of the most important elements of insurance is to protect your house and possessions. This protection can be against possible damage or loss in some unexpected event, such as a theft, or a fire, or due to bad weather.
If you have a mortgage on your property, most banks and building societies insist that the buildings are insured for their full value as part of the mortgage conditions.
When insuring your house, there are 2 different types of policies that you might need. Buildings insurance covers the fabric of your house, the walls, the roof, windows etc. Contents insurance covers your personal possessions. However, it is also possible to have a combined buildings and contents policy.
Exactly what you will be covered for will be described in your policy. You will be covered for loss or damage to your property in the event of fire, explosion, lightning, earthquakes, storms, floods, theft, vandalism, falling trees, water leaks or subsidence.
A buildings policy will also cover you for liability to other people if they injure themselves whilst visiting and it is due to your negligence. Accidental damage to underground pipes and cables will often be covered as well.
Normally, accidental damage to your buildings or property has to be purchased as a separate option as this is not normally covered.
There is normally a policy excess, which typically will be £50 for any claim except for subsidence, which may be £1000. The excess is the amount of money that you will have to pay if you have a claim. .
It is worth noting that storm and flood damage to fences and outbuildings such as a garden shed are normally excluded. Moreover, there is usually no cover for theft or for water bursts if your home is unoccupied for an extended period of time – usually more than a month.
There will be limits on the amount that you may claim for the loss of money (typically £300) or credit cards (typically £500) and there will be limits to the amount that you can claim for a single article.
It depends on the total value of your buildings and contents. Well during June 2011, the average Coversure customer paid £348 for their household insurance.
A good buildings insurance policy will provide cover for broken sanitary ware as well as pay for alternative accommodation if you cannot live in your home.
Another area to watch is that some contents insurances offer “New for Old” cover. What this means is that your possessions will be replaced at their new value. But, policies without New for Old” cover will pay the cost of a lost or damaged item at its worn or “old” value, that is the value new less an amount to allow for wear and tear. Some insurers will offer to replace valuable items such as jewellery or electrical items like televisions or cameras directly from appointed suppliers. Whilst there are advantages with this, you do not have to accept this offer and are entitled to take the cash value instead.
With some contents insurance policies, bicycles and freezer contents are included but this is normally up to a limit of £500. However, please check because some insurance exclude bicycles and freezer contents, if you want them covered you have to pay extra for that.
Many insurers ask you to declare your valuable items; this can be items worth more than £1000. These are usually specified individually under a separate “all risks” section of the policy. You may have to get an independent written valuation before valuable jewellery or works of art can be covered.
Obviously the value of replacing contents will go up as time progresses, some policies provide an index link to the amount covered so that you don’t need to review the cover every time the policy is renewed.
One area to watch out for is that Building Societies and Banks try to get you to believe that household insurances must be purchased from them if you take a mortgage with them. This is not true, but they have to be mentioned on the policy as having an interest in the property. Some may also charge a fee to check that a policy is suitable if it has not been supplied by them. Sometimes Coversure can arrange to have this fee deducted from your first year’s premium.
You should n ote that accidental damage cover is normally an optional extra that you have to pay for. The benefit of this cover is that in the event that you accidentally break an item, it will be paid for, subject to the normal policy excesses.
Another addition to a contents insurance that may prove useful is all risks insurance. This covers your belongings if you take them outside the home. However, these items are NOT covered if they are stolen from a motor vehicle, because you will be have to claim for them as part of the vehicle insurance policy.
This is just an introduction to household insurance and is not intended to be representative of the covers or restrictions offered by any particular insurance or that all insurance provide the protection described. You can get a recommendation for a particular insurance to suit your own circumstances by calling Coversure Leicester on Telephone: 0800 308 1055 Mobiles Call: 01163 190 107.