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Home Insurance
Your home will probably be the biggest investment you ever make and it is essential that you have proper insurance in case of damage by fire or other mishap. If you have purchased your home with a mortgage, the lender will insist that the building is adequately insured and will need to see a copy of the policy. Also remember that, when you are in the process of buying a home, your insurance cover on the property you are buying needs to take effect from the date when you exchange contracts, rather than the completion date when you become the legal owner.
There are four main types of home insurance policies, although many insurance companies will offer policies that cover a combination of risks.
Buildings Insurance. This covers the main structure - the walls, roof, fixtures and fittings. The exact level of cover may vary with different insurance companies and policies, so you need to check that the policy covers everything you need. Fire is often seen as the main risk, but flooding and subsidence can also be significant hazards.
Contents Insurance. This covers your own possessions that normally remain inside your home, such as carpets, curtains, furniture, beds, cooker, fridge, TV, audio and computers. This may also extend to the contents of your garage or garden shed. As with building insurance, policies vary and you need to check that you get the cover you require.
All Risks. This is insurance for personal items that you may take with you outside your home and are therefore at greater risk, such as cameras and laptop computers. These items can often be added to the Contents Insurance cover, but you may need to list these separately, with a description and value for each item.
Home Service. Many insurance companies are now offering protection for breakdowns or other problems that may arise within the home, such as plumbing leaks, drainage, electrical wiring or central heating. They provide a telephone helpline and either use their own engineers or have special arrangements with local specialists who will sort out the problem.
When giving you a home insurance quote, most insurance companies will need to know about any special protection or crime prevention measures you have in place, such as high security door and window locks, shutters or alarm systems. Depending on where you live, this can make a big difference to the cost of the insurance. We suggest that you get several quotations before making a decision.
NOTICE: These notes are offered as a general guide only and do not constitute financial or legal advice.
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