|
|
|
Home insurance is split into two categories: buildings (for structural problems and repairs) and contents (for loss of or damage to household belongings – from personal items such as jewellery to furnishings such as carpets). Policies normally cover incidents such as subsistence, fire, theft and damage due to natural disasters such as severe weather conditions. As with car insurance, the premium is calculated based on a number of potential risk factors. The higher the risk your home poses to the insurer, the higher the premium will be. You can help to keep premium costs down by taking a few simple safety and security measures such as fitting smoke detectors, burglar alarms and window locks. Most mortgage lenders require homeowners to have buildings insurance to safeguard the property. You may even find that your mortgage lender requires you to take out their own buildings insurance policy. Note that it covers the cost of rebuilding the home, not the market value of the home. Contents insurance, on the other hand, is optional, although most homeowners prefer to have contents cover. Some insurers offer joint buildings and contents insurance, although the two can be purchased separately. Buildings insurance covers repairs to (or the rebuilding of) the structure of the home, both internal and external, as well as any permanent fixtures and fittings such as your bathroom or kitchen. Events that could cause damage and may or may not be included in your cover (depending on your policy) are damage caused by: fire; lightning; explosion; earthquake; storm; flooding; falling trees; vehicle or aircraft collision; subsidence (land heave); accidents; water from burst pipes; and malicious behaviour. Some policies also cover legal expenses and personal liability. Contents insurance covers anything that is not a permanent fixture in the home, i.e. anything that could theoretically be lifted and moved. Contents are normally covered in the event of theft, fire or flood, and some contents insurance policies also include accidental damage cover. Types of possessions typically covered include items that are kept in the home, such as electrical equipment, personal items, clothing, food – such as freezer contents, items stored in garages or outhouses such as bicycles or lawnmowers, and sometimes even items that are damaged or stolen away from the home. Most of these items won’t have to be declared individually on your policy, which will normally pay out in the form of a lump sum for replacing items, to a stated maximum value. However, certain high-value items may have to be valued and insured separately, such as computer equipment, antiques, expensive jewellery, valuable paintings or special or large collections of items. It’s not always easy to compare like-for-like with contents insurance policies as they all operate differently and the level of cover can vary significantly. Some policies include clauses such as accidental damage, whereas others charge extra for them. Here are examples of things to look out for when comparing quotes: legal cover; accidental damage; new-for-old cover (replacing old items at the current purchase price for a new replacement rather than the current value of the old item); and damage to goods away from the home. This article is copyright protected and is not for republishing |
