In regards to house insurance, the main policies individuals can obtain are:
- Combined Buildings & Contents
This policy ensures that the structure, fixtures & the fittings of your home is covered. This type of insurance is compulsory if you have a mortgage. If you rent, there is no need to have this insurance as it should be covered by your landlord. You are usually covered against events such as flooding, fires and vandalism etc, but it is vital that you check your terms and conditions to clarify what you are covered for.
This policy covers your belongings within your home. Although not compulsory, it is a policy individuals should consider if you have expensive or sentimental items. This policy usually protects you against theft and damage of your belongings within your home and garage.
Combined Buildings & Contents
This policy includes cover for the structure & your belongings; this policy is most suitable to individuals who own their homes.
It is important to be aware that just because you have insurance, it doesn’t protect against everything. Often home insurance won’t cover you for events such as terrorism and general wear and tear. Therefore, individuals must take care when reading the small print in order to determine what your own policy covers.
Making a Claim
When making a claim, it is important to be aware of several factors:
- Accidental Damage
- New for Old
If you make a claim, the excess is the amount you pay towards the cost. If your policy has a higher excess cost, your premiums will generally be cheaper. This is because in the event of you claiming, the provider will be paying out less.
Each policy usually comes with a compulsory and a voluntary excess. For example, if your laptop was stolen and your claim was £400 and you had an excess of £100, you would receive £300 for your claim as you would have had to pay your agreed excess cost of £100. If your cover also involved a voluntary excess, for example £50; this would mean you would pay your compulsory £100, and your voluntary £50, giving you a sum of £250.
Subsidence is when the ground beneath your home begins to sink. Building insurance often covers damage caused by subsidence so when it comes to claiming for this, the excess can be very expensive, depending on your terms and conditions it can range between £1,000 and £5,000.
Cover for accidental damage to buildings or contents can often be limited within home insurance policies. Many providers may offer the feature of extra cover for accidental damage, but this usually results in an added cost. Therefore, it is very important that you check your terms and conditions in order to clarify what your own cover consists of.
New for Old
Depending on your cover, you can be entitled to brand new products or you may only receive products that are equal to the value at the time of damage or theft etc. In certain circumstances, insurers may only offer the cost of actually repairing the product rather than replacing it. Therefore, the small print must be studied to understand your cover.
Several other features of house insurance can often be forgotten, but it is essential to be aware of what your individual policy covers you for:
- Garden Cover
- Trace & Access Cover
- High risk Items
- Personal Possession Cover
Although buildings and contents cover may include some cover for your garden, the level of this cover will differ with different insurers. Many individuals may underestimate the value of their gardens with the equipment and plants etc so for some individuals, garden cover should be considered.
Trace & Access Cover
This cover involves finding the source of water or gas leaks. Frequently, in these events the costs can add up fast and can be extremely disruptive to your day to day life. Like garden cover, the levels of cover for trace & access can vary and may not actually be covered within your standard policy. If you are covered for trace and access, it can aid with paying for the process of finding the damaged pipes and repairing the problem. Therefore, it is important to check within the small print to establish whether this cover is included or whether the insurer is willing to add this onto the policy.
High Risk Items
Insurance of high risk items is not necessarily the most expensive items held within your home but the items which are mostly likely to be stolen. Usually, insurers ask you to record the contents in your home you feel are the high risk items; this then aids the insurer to determine the premium that is best for you and whether that will actually cover you for high risk item insurance. Cover for these items can be found within standard cover but sometimes they can be limited. Therefore, it is key that you are informed of what high risk items are included in your cover, if any.
Personal Possession Cover
Although contents insurance covers belongings within your home, they don’t cover your belongings that are stolen, damaged or lost away from the home. Some policies automatically include this cover within their standard terms so reading the terms and conditions can help you establish whether your needs are catered for.
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