Home insurance comprises of two
separate elements: buildings insurance and contents
insurance.
Buildings insurance, as its name suggests, is
concerned with the fabric of your home and safeguards against the
repair costs associated with fire, storm damage and floods etc.
Lenders insist on buildings insurance being in place as part of your
mortgage deal.
Contents insurance, meanwhile, covers your
household possessions against damage or theft.
While it’s convenient to take up the insurance
package offered by your mortgage lender, invariably it will cost
more. By shopping around, you’re almost guaranteed to save. And then you can spend it on something miles better than
insurance!
Although not compulsory, it’s usual to take out
buildings and contents insurance with the same company. It will
normally be cheaper – if not less hassle - than insuring with two
different companies.
Before looking for quotes, here are some of the
wider issues to consider when choosing an insurance policy that’s
right for you on both price and the cover included.
Valuations – Buildings insurance is based on the
rebuilding cost of your property, not the purchase price.
Occupancy – If you work overseas or you home is
unoccupied for long periods for any other reason, establish whether
you are covered when you are away. Most insurance companies will not
provide cover if the property is unoccupied for more than 30 days at
a time.
The excess - How
much will you pay towards a claim?
New for old – Are personal possessions replaced
on this basis?
Home office – There will be a limit on the value
of computer equipment covered. Will this be enough? Some insurance
companies insist on a separate policy if you run a business from
home.
Valuables - Antiques,
works of art and jewellery etc. should be flagged up at the outset.
Ensure that expensive items are specified on your policy.
Personal possessions – Confirm the extent of
insurance cover for personal possessions. Is theft and accidental
damage limited to home and garden? Will you be covered if you go on
holiday?
Freezer - Malfunctions,
extended powercuts or simply pulling out the wrong plug can all lead
to your freezer defrosting with disastrous consequences for its
contents. A freezer full of food can easily amount to the same as a
family’s weekly shopping bill and more. Ensure the policy you’re
being quoted on covers you for freezer failure.
