House Insurance explained

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Home / House insurance, or homeowners insurance, is an insurance policy that combines insurance on the home, its contents, and, often, the other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home.

Insuring your home is so important that most mortgage providers won’t grant a mortgage without buildings insurance; however, it’s worth shopping around for policies, as your mortgage provider may not be the best insurance provider.

Buildings insurance will usually cover both the structure and the permanent fixtures of your house such as plumbing, baths, toilets, doors and cupboards. You will need to check your home insurance policy to see if it also covers what are considered ‘outbuildings’ such as garages, garden sheds and the like. The insurance policy may cover for damage from a number of causes, which may include fire, landslide, flood, falling trees, vehicles, earthquakes or lightning.

About home contents insurance

You should carefully consider insurance for the content of your home. this is basically your possessions – such as your appliances, electronic goods, furniture and clothing.

Quite remarkabley one in four households do not have contents insurance, though – many of them renters – leaving them liable for loss or damage due to burglary, smoke, fire or flood and water.

Some contents insurance policies may also cover you for legal liability – the loss you would suffer if someone injured themselves in your home due to your negligence or lack of upkeep of the property, and sued you for damages.

Shop around for House and Home Insurance. Building and contents insurance policies may be sold together, but it’s worth investigating the cost of separate policies to ensure you’re getting the best price for your coverage.

With both buildings and contents insurance you will have a choice between basing the cost of your premiums on the number of bedrooms in your house – a convenient, but potentially costly method – and working out the exact value of rebuilding your home and replacing its contents on the sum-insured method, which may be more accurate but is also more complicated and time-consuming.

It’s important to work out the amount of buildings insurance you require based on what it will actually cost to rebuild your home, and not simply on the resale value, as these two figures may differ widely and you may be able to rebuild your home for much less than it would cost to buy in a strong real estate market. It is recommended that homeowners contact a chartered surveyor to assess the correct insurance replacement cost of a home.

Premiums on building insurance policies will vary widely from house to house, so don’t expect to get the same deal as your neighbour. Postcode and crime rate affect your Insurance premium as does the type of house you live in eg Thtched roof will equal greater fire risk adn the hme insurance premium will be higher.

You will also pay more for your insurance premiums if you wish to cover certain items which will not be kept in your home at all times, such as jewellery or a laptop computer.

Homeowners generally insure the contents of their homes with theft or disaster damage in mind. However, you’re probably more likely to damage or destroy an expensive item by accident, so accidental damage cover is a wise idea – it covers you for items that may be dropped and broken, scratched or otherwise damaged.

Beware

It is crucial to check the fine print of your building and contents insurance policies to see what is and is not covered, or you may suffer a nasty and expensive shock. The most common buildings insurance exclusions relate to damage from ordinary ageing and wear and tear; damage caused by your own neglect of the property, or by your pets; or damage you intentionally cause to the property.

Most home insurance polices will also have limits on what you can claim for individual items, and for the total value of your contents, but you may be able to negotiate more coverage for higher premiums.

Homeowners who travel a great deal need to ensure that their home insurance policies cover them for extended periods away from the property. Many policies will not cover theft or damage if the property is left vacant for 30 days or more, but again, for higher premiums you may be able to arrange special cover.

Read more and compare house insurance at Moneynet