Insurance all home owners need…

As a homeowner, your property is likely to be your most valuable asset; therefore it makes sense to have adequate protection in case disaster strikes. In order to protect your home properly you need to take out two types of insurance buildings insurance and contents insurance. The two polices can be bought together or separately.

Buildings insurance is compulsory if you have a mortgage. It is designed to cover damage to the structure of your home as well as damage to permanent fixtures and fittings. The buildings insurance policy must be sufficient to cover the rebuild cost of your home. When you take out a mortgage, your lender will try and sell you that particular company’s buildings insurance policy. Before you sign up, check the market for other policies and prices as mortgage lenders do not always offer the best deal.

Contents insurance is not compulsory but is certainly a wise investment. It provides protection against the loss of or damage to your possessions as a result of fire, theft and flooding. Most households in the UK are underinsured when it comes to contents insurance, and most people do not find this out until it is too late. The average value of the contents contained in people’s houses across the UK exceeds £40,000.

It is important to review your house insurance every few years. This will ensure you can take into account any changes in the value of your property and its contents and check that your insurer is providing the most competitive premium. If you don’t reassess your insurance , you risk being underinsured and your insurer refusing to pay out in the event of a claim.

Make savings on home insurance

Buying and renewing your house insurance is essential for any homeowner or tenant. By following some simple guidelines, it is possible to save hundreds of pounds on your annual policy:

1. Shop around on the internet: Many house insurers specialise in insuring different types of risk. Know what you want to buy and don’t be misled by optional extras that you don’t need. By shopping around you can significantly improve your chances of finding the right product at a suitable price. Use the Tiscali Insurancewide.com HouseWizard to find the most suitable and RELEVANT insurer. Price is not the only factor to consider. Relevance and previous success rates with your type of risk are important too.
2. Buy home insurance online: Some home insurance companies offer discounts if you buy your insurance online, though it’s not necessarily always cheaper.
3. Security: Make sure you have the right security locks fitted, such as a mortice deadlock or rimlock conforming to British Standard 3621. You should also install a NACOSS approved burglar alarm and join a neighbourhood watch scheme. Increased security measures can lead to a 5-10% discount on your policy.
4. Payment: Consider paying your house insurance premium annually rather than monthly. Some insurers charge a high APR on monthly instalments.
5. Keep your sum insured up to date: If you fail to inform your insurer of any new purchases or home improvements they may refuse to pay out in the event of a claim, leaving you to foot the bill.
6. Know the difference between buildings cover and contents cover: The correct level of buildings cover should cover the full cost of rebuilding the property, not the market value.

Building insurance is a legal requirement if you have a mortgage but beware, contents cover is optional, not everyone has it and many of those who do are under-insuring their homes as the contents increase in value year on year. Contents insurance should cover all possessions inside your home.
7. Avoid living in an area at risk of flooding or subsidence: If you live in a known flooding or subsidence area you will have limited insurance options. The best advice from the industry is stay with your current insurer and not to be drawn by the lure of different prices or schemes from other insurers. House insurance problems are not usually experienced by an existing owner; the hitch comes when a house is sold and the new owner tries to secure insurance. Ask the current owner about any problems they encountered when insuring the property and ask for the name of the insurance company they used, to ensure the most appropriate cover.
8. Check policy exclusions: A cheaper policy may be unsuitable because it may have several exclusions. House insurance does not provide cover for every eventuality. Read the small print to ensure you are fully insured for your needs. Know your contents value and be aware of individual item limits included in the standard policy. If you require additional cover this can usually be added for an extra cost.
9. ‘New for Old’ cover: This is also known as ‘replacement as new’ cover and means the insurer will pay out for the price it would cost to buy the items new. Most insurers will not provide ‘new for old’ cover on clothing, household linen, bicycles and audio/visual and computer equipment over five years old that has been damaged accidentally. For these items, a deduction is made for wear, tear and depreciation. In addition, deductions are made if items are not replaced or the sum insured does not represent the full cost of replacing the property insured.
10. Check the single item limit: Most insurers will pay up to a maximum of £1,500 but this limit does vary depending on the insurer. Always inform your insurance company of any expensive individual items you wish to include on your policy. It may be necessary to pay a higher premium or take out a separate policy. These options are often worth it to protect your most valuable possessions.