Although insurance is ultimately a promise by an insurer to pay out, beware: the devil is in the detail. Insurance policies are full of hidden catches and exclusions that can affect your right to claim. It pays to spend a couple of minutes checking your policy documents. Watch out for limits on what you can claim for as well as unexpected exclusions and optional policy extras. The golden rule is to be clear about what you what insurance to protect you against, and don’t pay for anything other than that specific cover unless you want to. And remember that cheap premiums often carry huge excesses, some of which are disguised as compulsory when in fact they are voluntary: you can reduce your voluntary excess limits in return for a higher premium.
70% of households are under insured, according to the British Insurance Brokers’ Association survey. The average value of household contents is rising all the time thanks to the ever increasing trend for expensive gadgets, home entertainment systems and designer clothes. If you don’t update your home contents policy to reflect such purchases you jeopardise your ability to make a successful claim.
Home contents insurance is designed to provide cover against unforeseen events like theft or damage by fire, flood or storm. But it will not cover all eventualities so make sure you read the policy documents carefully to be aware of the limitations and exclusions.
What to look out for…..
- If you live in an area that is prone to flooding, inform your insurer. Living in a flood zone will often mean limited house insurance options. The best advice from the industry is stay with your current insurer and don’t be drawn by the lure of different prices or schemes from other insurers.
- Make sure that you are aware of your single item limit. This limit varies between insurers, usually £1,000 to £1,500. The single item limit is the maximum the insurer will pay out up to for one item.
- Expensive items (e.g. jewellery or computers over a certain value (again, this varies between insurers) may need to be individually named on your policy and you may have to pay a higher premium or take out a separate policy. These options are often worth it to protect your most valuable possessions.
- ‘Personal Possessions’ or ‘all risk’ cover is not usually included in your standard home contents policy. You need to add this to your policy if you want your possessions (e.g. portable gadget and jewellery) to be covered when they are outside the home.
- Cover for ‘accidental damage’ is not always automatically included in buildings and contents insurance policies and is therefore often an optional extra. It is a useful option and should not alter your premium too much. It provides cover if your possessions are damaged accidentally, for example if put your foot through a floorboard to drill into a pipe.
- Take notice of the ‘reasonable care’ clause. Insurers expect you to lock your doors and windows and keep valuables out of sight.
- Keep your contents insurance up to date. Most homes undervalue their contents and could find insurers will not pay out the full amount when you make a claim.
- Make sure you have the correct security measures in place. Home insurers will usually require 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.
- If you are planning on leaving your home empty for a long period of time, check the number of days the insurers allows you to be away and still be covered. Make sure you inform them of long-term travel plans.
- If you have a child at university your insurer may cover their possessions when they are away. Check what the requirements are with regards to locks on doors and whether their belongings will be covered during the holidays. If not make sure their possessions are insured separately.
- Home insurance may not cover the following: garden fences, sheds and tools, money, credit cards.
- Always double check the excess level. A cheaper premium may well carry a huge excess. Be sure that you would be able to pay the excess amount in the event of a claim.
Most insurers will not provide cover for any of the following:
1.
