Buying the right home insurance policy for your house can be a tedious task requiring research of a wide range of products on the market to suit your requirements. The wrong type of home insurance could be costly in paying for services not required or services not including which are required. Before deciding you should request a copy of the policy, read it carefully and ask questions if you are not sure.
Here is a step-by-step guide to help you make the right decision:
There are two basic types of insurance for home owners, buildings insurance and contents insurance. In addition to buildings insurance you may wish to take out home emergency cover for an additional premium. If your property is tenanted then you will also be required to have landlord’s liability insurance. You will need to understand what should be covered under these insurance policies.
Buildings insurance normally covers loss or damage to buildings caused by fire, smoke, lightning, explosion, earthquake, storm, flood, subsidence, collision or impact, falling trees and branches, damage caused by burst or leaking oil pipes and damage caused by burst and freezing water pipes.
Theft, attempted theft, malicious acts or vandalism and accidental loss or accidental damage are covered. Civil commotion, riot, strikes, labour or political disturbances are also covered. To ascertain exactly what is covered and what is not you should study the policy document very carefully. In any case a property which was unfurnished or unoccupied at the time of the loss or damage is not covered.
Home emergency insurance normally covers call out costs ie, labour, parts and materials for an emergency service following an insured event up to an agreed amount which will include VAT. Check that alternative accommodation is provided while the emergency repairs are being carried out.
Contents insurance normally cover loss and damage to the property owner’s fixtures, furnishings and furniture up to the value stated in the policy or the market value ascertained by the insurer including VAT. Fair wear and tear is not included.
Landlord’s liability insurance is required if the owner’s property is tenanted. The insurance will cover all amounts which the landlord has a legal liability to pay as owner for accidents which happen in or the property which results in injury or illness of any person or loss or damage to the property. Generally the limit of £2 million for all claims arising from any one event plus costs and expenses.
Check that your policy covers loss or damage to outbuildings, such as sheds, barns, garages, stables, your garden and fixtures. If you require them to be covered you should make it known before the insurance policy is drawn up.
A common mistake is to buy homeowners insurance from a mortgage broker. Invariably the insurance you will be offered will not be the best product for your particular circumstances nor will it necessarily be value for money. Shopping around will often save a lot of money in the long run.
You should ask your insurance provider how replacement costs would be valued in the event of a claim for loss or damage arising out of these insurances. Current market valuation is preferred.Other important matters to check in the insurance policies are; policy endorsements and exclusions.
A number of UK organisations/agencies specialize in providing good home insurance deals, which include Aviva , Gocompare , Saga , AXA and Churchill