Home Insurance Explained
Home owners need to remember that there are two key elements when buying insurance for the house. These are insuring the property itself and insuring the contents. Here are some other issues to consider.
Why have home insurance?
Buyers can shop around for the best insurance deals, although it is worth remembering that their property will most likely be their most expensive asset so it doesn’t pay to just go for the cheapest option.
What is covered?
Home insurance generally covers loss or damage caused by fire, storms, electrical faults, leaking pipes or burglary. Building insurance will normally cover any damage to the actual building and possibly the garden, garage and other outbuildings.
It is however vital to check the small print in case there is any exclusion to the policy, or to see if unusual events are included such as damage caused by vehicles or bomb blasts. A home owner could be left heavily out of pocket by a disaster not included under the terms of their policy.
Read an article on how to Save money on Insurance
What isn’t covered?
Home owners should not assume that everything is covered under their insurance policy. Often damage or loss caused by subsidence, flooding in areas vulnerable to flooding, wind damage in areas susceptible to cyclones and acts of war.
In some cases it is important to ask specific questions about insurance cover to be clear about what is covered. One such instance could be for damage caused by pest infestation, which insurers often consider as the homeowners obligation to prevent.
What other policies are required?
Whilst the garage may be covered under building insurance, it does not mean the car is covered too. A separate car insurance policy will be needed to cover the vehicle. Other house contents of very high value such as an expensive painting or piece of furniture should be insured separately under a specific policy.
Home owners may also need to have additional clauses added to their policy, where perhaps they have a holiday home left vacant for long periods of time. For people working from home it may also be necessary to have a separate policy to cover their home office equipment as this may not be covered under the home insurance policy.
Should investment properties be insured?
Generally an owner should purchase building and contents insurance for their first home and holiday home(s). For investment properties they should only require building insurance, with the tenant having responsibility for the contents insurance.
Are there policies to cover all circumstances?
Insurance cover can be purchased to cover every eventuality such as damage caused by meteors. However, for every possible event added it will of course push up the price of monthly payments.
What will the cost of insurance be?
The price of insurance varies from company to company. The insurers’ methods of calculating premiums involve factoring in the property and contents value, the homeowner’s credit rating and location of the property amongst other things.
Read an article on how to Save money on Insurance
Essentially it is advisable for the home owner to get as many quotes as possible and weigh up what is right for them. They should not be afraid of asking as many questions as they want either, to ensure they know exactly what they are getting and at what cost.