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Home Insurance
Insuring your property
What does my mortgage lender require?
There are two types of home insurance. Home contents insurance which is not a legal requirement and building insurance which is something that your mortgage lender can insist upon.
Contents Insurance
Fire, flood and theft
Home contents insurance may seem like an unnecessary expense especially when you are just moving house and have so many other expensive other bills to consider.
However if you look around your home you will see that the financial investment that you have made to the contents of your home is considerable. If you should have a fire or flood or your home was burgled think how much it would cost to replace expensive gadgets, carpets, jewellery or even the whole of your home contents.
Types of contents insurance
There are usually two types of contents insurance. The cheapest one is an indemnity policy. This type of policy will take into account the wear and tear on an item. If you make a claim for damaged curtains the payout will take into account the age of the curtains.
A new for old policy, which is usually more expensive, would mean that you would be covered for the cost of new curtains.
How much cover?
To ensure that you are taking out the correct level of insurance it is advisable to list the contents of each room and find out how much replacement items would cost. Then check that your insurance cover is sufficient.
You can also take out extra cover for special items such as jewellery or antiques or items that you use outside of the home or even the contents of your freezer. Accidental damage can also be added such as spills on the carpets or broken ornaments.
Building Insurance
When should I buy?
Buildings Insurance should be taken out at the same time that you buy the property. You do not necessarily have to take out the building insurance offered by your mortgage provider. It is advisable to shop around.
What is covered?
This type of insurance covers the building against fire, flood, storms, burst pipes, fallen trees, and explosions from gas leaks or vandalism. It covers the fixtures and fitting such as walls, floors, ceilings, doors and windows. Outbuilding and fences may also be covered.
Be aware that you are only covering the rebuilding of the property not the market value. Although if your home is unusual or a period property this must be taken into account.
Remember if you extend your property you must increase the insurance cover.
Read the small print
Read the small print on your policy as certain circumstances can invalidate the policy.
If you have burglar alarm and don’t use it or you leave windows open and are burgled you may not be paid out.
Thefts must be promptly reported to the police and a crime number obtained. Make sure that ladders and tools are locked away. Upgrade the locks on doors.
As with any purchase it is important to shop around, but always read the small print to ensure that buildings insurance policies you are concidering have the smae level of cover.
Need to ask a question?
Ask any question about buildings insurance, or contents insurance
As a first time buyer you need a buildings insurance. Some mortgages include building insurance as part of the deal.
If you would like advice on choosing buildings or contents insurance follow the links below.
There is no obligation with either of these services, and both are offered completely free.
