Five things you should consider when choosing your home insurance
A condition of many mortgages will be that you buy home insurance, in order to make sure your new property is protected. But with so many choices out there, how do you decide what to choose?
We take a look at five things that you should consider when choosing what home insurance to go for.
The type of insurance
There are two different types of home insurance cover: buildings and contents.
Buildings insurance covers the actual building. It normally covers property damage from fire, floods, storms, and vandalism.
Contents insurance covers your belongings, usually against theft, fire and flood damage and vandalism. However, for both, it is best to check exactly what the policy covers.
If you own the property, it is best to take out both buildings and contents insurance. You can choose to get these from the same or different insurers, with some companies offering a discount for combined insurance.
For renters, building insurance will normally be covered by your landlord, but you can take out contents insurance to protect any of your belongings, such as laptops or TVs.
The excess is a fixed “self insured” amount deducted if you make a claim on your policy. For example, if you have an excess of £200, and make a claim agreed at £500, your insurance company will pay you £300.
There are two types of excess: compulsory and voluntary. Compulsory excess is applied to every policy claim and it is a term of the contract fixed by your insurer. However, you can choose to add voluntary excess. Your premiums will be smaller if you do decide to increase your excess, because it will cut the amount the insurer is liable to pay out.
What is covered?
Many insurers provide a standard level of coverage under basic contents insurance, so if you have any expensive items, such a bicycles, jewellery or high-tech items, it could be worth speaking to your insurer to see if these are covered, or if you will need to take out additional or separate cover.
It is also worth looking into ‘new-for-old’ cover for your belongings. This means, in the event of a claim, lost or damaged items will be replaced by a similar new product, instead of the amount of money which the old item was worth when it was damaged or stolen.
Out of home cover
If you take your laptop out and about with you on your daily commute, or often leave your bike chained up on the street, it is worth looking at contents insurance that will allow these to be covered outside the home – as well as checking whether your garden shed is covered by the insurance.
Some contents insurance even protects your handbag and credit cards, or your luggage when you are on holiday. However, you will need to check exactly what is covered, as all providers will vary.
Can you lower the cost of your policy?
When signing up to a policy, the insurer will ask you a range of questions, to work out the risk of making a claim.
If you have a burglar alarm, have secured locks (such as the five-lever mortice deadlock) or a no-claims discount, this can all hold you in good stead.
Insurance is a worthwhile contract, provided you are careful to ensure what you obtain meets your requirements. A reputable broker can be very helpful in advising you what to do.