Types of Home Insurance Cover on the Market

Whether you live in a small rented flat or a mansion in Kensington, most people need some sort of Home Insurance.

The type of cover you need will depend on a number of factors, including whether or not you own where you live, the size and type of property, and how much you care about your possessions.

What is Home Insurance?

Home insurance’ is an umbrella term which consists of two main elements; buildings insurance and contents insurance.

What’s covered by policies varies between providers, and often depends on how much you spend, but generally there are a number of common features:

Buildings Insurance

  • Buildings insurance is there to cover you in the event of your home needing completely re-building, or if it’s partly damaged and needs repair work.
  • The amount of cover you opt for should reflect all the costs associated with totally re-constructing your home if it were totally destroyed (this is not the same as its current market value).
  • Most buildings cover policies will financially cover you from damage caused to your property by storms, tree damage, fire, flooding, subsidence, burst pipes, vandalism, malicious damage, and vehicles or planes hitting it.
  • In most cases policies also include (although not always) cover for outbuildings such as garages, conservatories and sheds.

Who needs buildings insurance?

  • If you have a mortgage, it will be a legal requirement as part of the terms of your home loan.
  • If you own your home outright, you’d be somewhat crazy not to have it.
  • If you live in a leasehold flat, buildings insurance is usually provided by the freeholder (often via their managing agent) and the cost then passed on to the leaseholders.
  • If you rent your home, it’s nearly always the responsibility of your landlord.

Contents Insurance

Contents Insurance provides protection for everything you have in your home; from electronics, jewellery, clothing and white goods to mirrors, carpets, curtains, and furniture.

As with buildings cover, the majority of contents insurance policies will protect your possessions and home’s contents against damage by flooding, fires, storms, burst pipes etc. It will also cover against loss by theft.

Who needs contents insurance?

Contents insurance isn’t compulsory, but whether you own your home outright, have a mortgage or rent, it’s certainly a good idea to have it; Sainsbury’s Bank recently put the average value of a home’s entire contents at £55,000.

If you have individual items of great value (ordinarily worth more than around £2,000), such as a piece of jewellery or musical instrument, for example, you might need to pay more than for a standard policy or insure such items individually.

Combined policies

While you can take out buildings and contents insurance in separate policies, but if you are going to take out both it usually pays to go for a combined home insurance policy.

Insurers will nearly always offer you a cheaper deal than if you buy the two types separately.

Policy Add-ons

Don’t assume that your home insurance will cover you for all eventualities however. The elements described above will be covered by most policies, but there are ‘add-ons’ which you might assume are included when they are not.

Home Insurance Add-ons can include:

  • Items outside the home – Covering your possessions when you take them out and about with you.
  • Accidental damage – So that if you, your children, or family and friends cause accidental damage to your possessions, you’re covered.
  • New for old – Policies will commonly replace your old goods with their new equivalent (hence ‘new for old’), but many cheaper policies won’t. It’s always worth checking this.
  • Key cover – For the replacement of locks and keys if you lose or have your keys stolen.
  • Emergency assistance – For those times when you need a plumber, electrician, builder etc. at short notice.
  • Bicycles – Bikes are so often stolen that many insurers don’t cover these as standard within the contents insurance element of your home insurance cover.

Policy Expert

Policy Expert can help you find the right Home Insurance deal for you, by searching our panel of insurers. Our team are dedicated to helping customers find the insurance policy that’s right for them. Policy Expert will help you find not only the best value insurance, but the right insurance for your individual needs. For more information on Buildings and Contents Insurance from Policy Expert, speak to one of our experts on 0203 014 9300 or email ask@policyexpert.co.uk

 

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The views expressed here are solely those of the author and do not necessarily reflect the views of Policy Expert.