Insurance

Home Insurance = Peace of Mind

Your home is your castle and everything within it your crown jewels, but since you probably don’t have a troop of beefeaters to stand guard, it’s a good idea to opt for some home insurance.

Adequate home cover will afford you peace of mind so that if your home is damaged or destroyed it will be repaired or rebuilt, or if your possessions are damaged or stolen you will be compensated.

To help clarify all things Home Insurance, we’ve put together this helpful guide: from the different types of home insurance to top tips on reducing your premiums – plus some handy hints on burglar-proofing your home.

But first, some home insurance food for thought:

According to Home Office figures, England and Wales have among the highest burglary rates in the world, with a burglary taking place every 20 seconds.

Around 25% of households have no contents cover, which means that residents of around six million homes have no one to turn to if their possessions are lost or ruined as a result of fire, storms, burglary or flood

Less than 65% of households have buildings insurance, leaving the remainder exposed to huge bills in the event of property damage.*

*Source – National Statistics Office, 2006

Know Your Buildings From Your Contents Insurance

Home Insurance breaks down into two types Buildings Insurance and Contents Insurance

If you rent a property you only need to worry about contents cover. If you own a property, you’ll probably be required to have buildings insurance as a mortgage condition, whereas contents cover is voluntary, as it is only you who will lose out in the even of theft or breakage.

A good rule-of-thumb for telling the difference between buildings and contents insurance is to imagine you’re a giant and able to pick up the house in your hand. Now turn the house upside down and give it a shake. Everything that remains in place (walls, doors, bath, sinks etc) is covered by buildings insurance while everything that falls to the ceiling (television, bed, sofa etc.) is covered by contents insurance.

For free advice and quotation please complete the following form and we will arrange for our insurance broker to give you a call.

Insurance Guide
  1. Buildings Insurance
  2. How Much Buildings Insurance do I need?
  3. Contents Insurance
  4. How Much Contents Insurance do I need?
  5. Additional/Extended Cover/Accidental Damage
Buildings Insurance What’s Covered?

Buildings insurance covers the structure, fixtures and fittings of your home, e.g. roof, walls, ceilings, floors, doors and windows, fitted kitchens, built-in cupboards and bathroom suites.

Most buildings insurance policies will also cover certain outdoor structures such as sheds, garages, gazebos and greenhouses. Fences, gates, boundary walls and damage to mains supply pipes may not be covered, so it’s important to read your policies small print carefully to see exactly what’s included.

A comprehensive buildings insurance policy should cover the full cost of repair/rebuild in the event of:

  1. Fire
  2. Lightning strike
  3. Storm damage
  4. Falling trees
  5. Explosion (caused by gas leaks etc)
  6. Earthquake
  7. Damage through contact with a vehicle or vandalism
  8. Bursting or freezing of the plumbing

Be sure to check that you’re covered for subsidence and flood if your property lies within a risk area. This extra cover may cost more but you’ll breathe a massive sigh of relief should anything ever go wrong. You might also want to check that your buildings insurance policy provides you with alternative accommodation if your home becomes temporarily uninhabitable.

Subsidence

Homeowners with properties built in areas with high clay content are at risk of subsidence, and houses in such areas may be subject to policy excesses up to around £2,500.

To reduce the likelihood of subsidence, take care not to plant trees and large shrubs too close to your property as they suck up the moisture in the ground, causing the clay to shrink. If you already have trees, don’t just run outside with an axe in the hopes of lowering your premiums – you may need council permission before any felling can take place.

Flood

About five million people in the UK live in two million properties that are at risk of flooding. You can find out if your house is at risk by entering a postcode in the Environment Agency’s online flood risk map. If you do live in a flood zone, here are some tips on how to weather the storm:

If you want to stop sewage backing up into your home during a flood, have your drainage pipes fitted with one-way valves.

Raising the height of plug sockets will lessen the chances of electrical damage.

Permanently fit doors, airbricks and low windows with flood skirts. In the event of flooding, these slide into place to form a watertight barrier.

If you do live in a flood-prone area, keep important documents, including contact details for your insurer and a copy of the policy, in a waterproof bag.

Replace downstairs wooden flooring with concrete and consider tiling rather than carpeting.

Have your downstairs walls re-plastered with a special water-resistant render.

Is Buildings Insurance Compulsory?

If your property is mortgaged then your lender will require you to have adequate buildings insurance in place to help safeguard their investment in your home. This cover will likely need to run from the date of exchange of contracts right up to the full term of the mortgage.

You may be offered buildings insurance by your mortgage provider but you are not obliged to take it, unless of course you sign up to a mortgage deal which specifically requires you to buy their insurance.

However, if you don’t take out a mortgage provider’s insurance product, they will sometimes charge a fee (usually around £25) to cover the cost of checking that your preferred buildings insurance product is up to scratch.

It’s worth noting that some insurance companies will actually pay this charge for you as an inducement to signing up with their product – something to bear in mind when shopping around for a deal.

Honesty is the Best Policy

One more thing: always be forthcoming with your insurer when taking out buildings cover as this type of insurance relies on ‘utmost good faith’ from the policyholder, i.e. any potential issues that you know of must be disclosed. Failure to do so may invalidate a policy should you come to make a claim.

How much buildings insurance do I need?

When assessing how much building insurance you require, be aware that you only need to insure the cost of rebuilding your homeand not its market value.

If you live in a period house or unusual property, you should ensure that your cover is high enough to allow for rebuilding in the style of your home.

A common oversight occurs when homeowners extend their properties but forget to increase their buildings cover. In the event of a claim, a payout will only be made on the part of your house covered by insurance – a potentially costly error.

The rebuild cost of your home can be found on your home survey/buyer’s report or you can work it out by using the house insurance rebuilding on the Association of British Insurers' website.

Contents Insurance What’s Covered?

Contents Insurance covers your household possessions against loss, damage or theft. Items covered by a typical contents policy include electrical goods (hi-fi, TV, DVD player etc), your CD and DVD collection, plus furniture, carpets, clothes, ornaments and paintings.

Typically, there are two types of standard contents insurance. The cheapest is an 'indemnity' policy, which takes into account an amount for wear and tear. For example, if your six-year-old rug is ruined by leaking water, the payout reflects the age of the carpet. Generally more costly, though some bargain deals can be found, is a 'new for old' policy, which means that you’d be paid the full amount for a new replacement rug.

Some insurers offer accidental damage cover as standard, but in most cases you will have to pay extra for this. Extra cover can also be bought for valuable jewellery, antiques, artwork, transportable items, and even the contents of your freezer should a power cut cause it to defrost.

Is Contents Insurance Compulsory?

Unlike buildings insurance, contents insurance is optional as your home’s contents belong to you. Nobody, other than yourself, is at risk of loss should a burglar take a fancy to your stuff, or should a cigarette send your belongings up in smoke.

However, if you place value in your belongings, for peace of mind you should consider insuring against loss, damage or theft.

How much contents insurance do I need?

When buying contents insurance, don’t make the mistake of underestimating the worth of all your goodies such as CDs, DVDs, clothes, carpets, curtains, jewellery, electrical goods, bedding, books and kitchenware etc.

To work out how much contents insurance you need, make a list of the rooms in your house and under each heading write down all the items within them. And don’t forget to pop outside and list garden ornaments, bicycles and items stored in the shed if you want these included in your cover.

Alternatively, the Association of British Insurers (ABI) has a home contents value calculator to help you work out the value of your possessions.

Once you’ve made an inventory of your entire home’s contents, total their worth to work out how much contents insurance protection you require.

Note: you should ideally value your home once a year, and always after redecoration or buying new, expensive items.

Additional/Extended Cover/Accidental Damage

Always check what's included in the policy Some home contents insurance products cover certain items and circumstances at no extra charge whilst others only include them as additional extras. For example, ‘high-risk’ or ‘high value’ items may need to be listed separately and protected with additional/extended cover.

These may include:
  1. Antiques
  2. Expensive audio-visual equipment
  3. Coin, stamp and medal collections etc.
  4. Computers
  5. Jewellery
  6. Pictures and works of art
  7. Expensive watches and clocks
  8. Examples of types of additional/extended home cover include:
  9. Extended Accidental Damage – this protects you from such things as DIY disasters or accidentally staining your new sofa
  10. Family Legal Protection – offers you legal liability protection in certain circumstances such as being sued by someone who was injured in your property
  11. Guests’ Possessions Cover – covers your guests' possessions against loss, damage or theft while on your property
  12. Moving Home Contents Cover – protects your contents against loss, damage or theft during the period of moving home
  13. Freezer Cover - research showed that the average freezer contained £173 worth of food, with 34% of freezers containing between £200 and £500 worth of perishables. Freezer Cover ensures you’re not left out in the cold should your freezer malfunction or if there’s a power cut
  14. Sports equipment or bicycle cover
  15. Garden equipment cover (can also include toys).
  16. Items in outbuildings/garage cover
  17. Alternative Accommodation – provides emergency temporary alternative housing
  18. Locks and keys – covers lost/stolen keys or damaged locks
  19. Emergency Assistance – cover for temporary repairs due to domestic emergency
  20. Cash/Credit Card – provides cover for theft
  21. Christmas uplift – amount of cover extends over the festive period
  22. Utility cover to and from property – covers underground service pipes/cables
  23. New for Old - claims paid on a new-for-old basis (except clothing and household linen)

Contents Insurance can also be extended to cover items that leave the home with you, such as laptop computers, MP3 players, cameras, SatNavs, handheld games consoles, mobile phones etc. (sometimes called an ‘All-Risk’ policy). Alternatively, you can insure such items separately with a gadget cover policy.

You can also extend policies to cover children away from home in university accommodation, or to cover the Christmas season when there may be more valuables in your home.

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