Home Insurance-Benefits and cover explained

This blog today explains what home insurance is and may help you choose which policy to buy. So if you are moving home, or have already moved and don’t have cover or perhaps just trying to increase your knowledge about the cover it can provide then this is just for you

Essentially Home insurance consists of Building and Contents Insurance. Although you can buy these separately, there are significant benefits for combining them in one policy e.g. one excess and insurer in the event of a claim, discounted premiums and one renewal date.

You may require a standard policy or a high net worth policy depending on what type of home you own and what type of property you are covering. For example if you own a 3 bedroom home worth £180,000 you would need a standard policy whereas if you own a 5 bedroom mansion worth £1,000,000 then you would require a more bespoke policy written around your specific needs and lifestyle. Similarly if you have a valuable collection of art, antiques wine etc, then a bespoke policy would be required.

Below are some examples of the types of perils you would normally expect to insure for and what they cover.

Buildings Insurance

This covers damage to your building and includes; garages, permanent fixtures and fittings (showers, baths, sinks, etc), paths, patios, walls gates and fences. This cover is recommended if you are a home owner and would like to protect your home: In many cases it is the most valuable possession you own. If your home is bought via a mortgage, many lenders will require you to have this insurance to protect their interests in the property.

As with the Contents cover, Buildings Insurance usually covers you for loss or damage caused by specific perils for example: fire, lightning, explosions, earthquake, smoke, storm or flood, malicious damage, theft, collision, and falling trees. I recommend checking your policy to make sure exactly which perils you are covered for.

Contents Insurance

This cover is usually bought individually by tenants or combined by home owners to insure the contents inside the home. If for example you tipped your house upside down everything that would fall out would be your contents. For example this would include household goods, personal property, money, jewellery, valuables, art work and furnishings.

As with the Buildings cover, Contents insurance covers you for loss or damage caused by specific perils for example: lightning, explosions, earthquake, smoke, storm or flood, malicious damage, collisions,  and theft, . Again I recommend checking your policy to find out exactly which perils you are covered for.

Extensions such as legal expenses, travel etcetera are available. I will write future blogs so you can find out what extensions may be suitable for you.

Before getting a quote make sure you are clear on what your property rebuild value is (this not the market value of your property)as there are consequences for being underinsured when making a claim or you may be paying too much premium if the rebuild value you have given to the insurer is too high . You can check your property rebuild value by visiting- http://abi.bcis.co.uk/calculator/calculator.aspx

I hope this article was helpful. If there is anything you would like this blog to address in the future please feel free to comment below.

Peril- exposure to the risk of being damaged, destroyed.

Policy- contract between the insurer and the insured.

What does Personal Lines Insurance mean?

Personal lines insurance includes Car insurance, Home insurance, Travel Insurance, Pet insurance, Mobile insurance and any other types of Insurance not used for Business purposes.

Personal Lines are designed to insure common risks and have standard cover for everyone who is insured through the insurer. Example:-

Bill and Ben are brothers. Bill lives in South Wales and Ben lives in London. They both drive different cars and  Bill lives in a spacious 3 bedroom house while Ben lives in a fancy apartment. They both use the same insurer  and their policy for car and home insurance so they are covered for the same things although the premiums will be different according to the postcodes , type of car, previous claims history ect.
Of course extensions such as legal cover are available and I will talk about individual policies and the recommended extensions to go with them.

The best way to obtain personal lines insurance would be through your broker as they can ensure the cover meets your exact needs, highlight any exclusions or limitations to you and will recommend insurers that they now will perform when you need to claim. Your broker can also make the claim for you if they have a claims handling department and you would benefit from their experience as they deal with claims on a day to day basis.

If you decide to obtain the insurance yourself do research on the company to see if they are good at paying claims or ask a friend to recommend there insurance provider to you if they have had claims paid. Always check the policy before signing up to anything for exclusions or warranties that aren't covered, especially when signing up on comparison websites. Remember when something sounds too good to be true, it usually is so do your research.

Carry on reading as I will be writing on individual personal lines, what extensions to get how to ensure you get the best cover for your money.




  




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