Insuring Your Home: What You Need to Know

Choosing the best deal from the wide range on offer can be a real headache. Financial gurus Morris Owen give us the low down on what to look out for when insuring your home.

The key aim of insurance policies is to provide financial protection for the various eventualities which can happen in life. Knowing you are covered in the event of an accident offers peace of mind and financial security.

Insuring your home will offer vital cover if your house is damaged as a result of natural disasters (such as floods, storms, or subsidence), accidents (such as burst pipes), and acts of burglary. It will also provide protection in the event of damage caused to other persons or properties.

There are two key types of household insurance:

Buildings Insurance

This covers the structure and fabric of your house, including the roof and foundations.

An extension for Accidental Damage cover is usually recommended (for example, to provide cover in the event that you put your foot through the ceiling while in the loft).

Contents Insurance

This covers everything that you would take with you if you were to move house, such as iPads, expensive watches, jewellery, clothes, cameras, furniture, and so on.

However, it is important to note that not all policies offer cover on a 'new for old' basis, and many will deduct an amount for wear and tear.

There are two extensions offered under contents insurance, both of which are usually recommended:

Accidental damage (e.g. should you accidentally spill a pot of paint on the carpet)

All risks/ personal possessions cover, which covers items outside the home, such as a camera or jewellery, up to an agreed value.

Premiums

The level of premium will be affected by a number of factors, such as:

• Your postcode
• Any security devices you may have, such as a burglar alarm
• Your patterns of occupancy (e.g. if you are away for long periods)

You may be able to obtain a discount for buying both buildings and contents insurance from the same insurer.

As with all insurance policies, it is essential to make sure that the cover you take out is sufficient and suits your personal needs. It is also important to review your household insurance on a regular basis, as the cost of rebuilding your house and the value of your contents can change substantially over time.

Useful Tips:

• Check what is covered by your policy - is it at the correct level? You should make sure that you are adequately insured, and equally that you are not paying for cover that you do not need
• Read the small print - look out for limitations and exclusions, excesses, etc
• Always disclose all details as requested; if an insurer discovers that you have not, they may refuse to pay out in the event that you need to make a claim
• Revisit your policy regularly to ensure that it continues to suit your needs

You should always seek qualified professional advice before committing to a new insurance product.