A Guide to Home Insurance
What You Need to Know
- Shop around and compare home insurance policies for the best deals.
- Read up on insurance industry jargon before parting with any money.
- Make use of online experts or IFAs if you are still in doubt.
- Building contents insurance will be required by most lenders before they will grant you a home loan.
- Always read the small print before signing a contract.
- Taking small home improvement steps can push the price of cover down.
- Remember some contents policies take deprecation of value into consideration.
As the name suggests, building insurance covers the 'bricks and mortar' of a property, as well as the permanent fixtures inside it, such as a kitchen or bathroom suite. Additionally, these policies usually cover outbuildings such as garages and sheds from fire and third party damage.
Most mortgage lenders, the Times advises, will ask you for a copy of a building insurance certificate before they offer you a home loan, making this type of cover all-but-essential for most people.
It's well worth reading the small print of any building insurance policy. While some will protect against storm and flood damage, there may nevertheless be clauses ruling out cover for this, as well as for burst pipes and subsidence.
Again, as the name suggests, contents insurance covers the possessions kept within a home.
Here, you can either opt for 'new for old' cover or 'indemnity cover'. While for the former you will be paid the value of your contents with any relevant depreciation in value taken into account should they be damaged or stolen, the latter type of policy - for an extra up-front cost - guarantees that the gods in question are replaced with brand new versions.
As before, it's well worth shopping around for the best deals on insurance at home and also checking the small print and terms and conditions. Notably, some policies may not pay out should it be determined that a home was not adequately secure - with this particularly troublesome in the case of old homes - while a wide range of similar opt-outs may also be present in a contract.
One other policy type worth considering is an 'all risks' deal, with this covering the loss or theft of possessions outside of the home, for example a stolen bike or a lost mobile phone.
Aside from the standard home insurance policies available on the market, there is also a wide range of niche products out there.
For instance, second-home insurance takes into account the fact that a property may be unoccupied for long periods of time, landlord insurance will cover the damage done to a property by tenants, while tenant insurance will guard renters against loss or theft insider someone else's property.
Similarly, special deals are available for students and older people, so it's important to shop around and find the best deal to suit your particular circumstances.
Getting a Quote
There are a number of ways you can go about getting a quote for a home insurance policy. Perhaps the simplest way is to go directly to the insurer, with most high street banks and even supermarkets offering cover and happy to deal with prospective new customers either over the phone or in person.
Alternatively, it can be wise to make use of expert knowledge and go through an intermediary. Personal financial advisors can still be used, though they are much more expensive and have a more-limited overview of the market than online comparison sites.
Keeping Costs Down
As well as shopping around for the best deal, there are a number of ways you can take the initiative and cut down the cost of your policies yourself.
For instance, carrying out structural work on a home, such as shoring up the foundations, can help reduce the cost of a building insurance policy. Similarly, beefing up your home security can also help cut the costs of contents insurance, with the long-term savings usually more than making up for any short-term investments.
- Read up on home insurance with the help of the Association of British Insurers.
- Learn about keeping your home secure with the help of the Metropolitan Police .
- Shop around for the best deals on home insurance on UK Net Guide’s insurance comparison pages.