11:48 30 April 2013
Home insurance isn’t a subject you think about every day but, whether you’re buying this kind of cover for the first time, or your existing policy is coming up for renewal, ticking off some pointers first could make your life both easier and cheaper.
Here are 10 things you need to know before buying home insurance.
1. There are two types of cover
When it comes to insurance, your home is divided into two parts: buildings and contents.
Buildings insurance covers the fabric of the building, as well as any permanent fixtures and built-in appliances. Contents insurance covers your belongings, including furniture, clothes and electrical items.
If you’re a homeowner, then you should take out both types of cover – and some insurers offer discounted rates for combined buildings and contents policies. If you live in rented accommodation, the buildings insurance should be covered by your landlord.
2. What does buildings insurance cover?
Buildings insurance usually covers you against damage to your property from the following:
For more information on flood damage and making a claim, click here.
3. What does contents insurance cover?
Contents insurance generally covers your belongings against:
4. Make sure you’ve got enough cover
When taking out buildings insurance, make sure that your home is covered for the rebuild value, not the market value. When you ask for a quote through MoneySupermarket, we will use the information you provide to estimate the rebuild value.
The best way to calculate the value of your contents is to go from room to room and note down the value of each item, from clothes to computers to the contents of your fridge freezer
It’s important you get it right as undervaluing your contents will leave you underinsured, while an overvaluation will unnecessarily increase the cost of your cover. Click here for our home insurance calculator.
5. Consider New for Old
When taking out contents insurance, always get ‘new for old’ cover for your belongings as this means they will be replaced with a like-for-like new product, rather than the amount of money that the old items were worth.
For example, if you claimed for a five-year-old 32-inch television, instead of just getting the amount you’d pay for a five-year-old TV set, you get a brand new 32-inch television.
6. Do you need cover away from the home?
If you have expensive items that you often use away from the home, such as a laptop or a pushbike, then it may be worth having these items covered against theft or damage when being used somewhere other than your house.
Also check to see if your insurance covers items such as the contents of your handbag or wallet, credit cards and luggage when travelling abroad and even items kept in your garden and shed .
7. Protect valuable items
If you own valuables such as jewellery, antiques, collections or high-spec electrical items, then these may not be covered under the basic terms of your contents cover. So check with your insurer and take out separate cover if necessary.
8. Do you own an unusual property?
Insurers like brick built, slated roofed properties so if you own an unusual property, such as a renovated windmill or a listed building, or your property has an unusual feature, such as a thatched roof, you may have to take out specialist cover.
Premiums for unusual properties tend to be higher because they pose a greater risk to insurers. For instance, listed buildings have higher rebuild costs, while thatched roofs present a greater fire risk.
9. What excess can you afford?
Just as with car insurance, most home insurance policies come with both a compulsory and voluntary excess, and choosing to pay a higher voluntary excess can bring down the cost of cover.
However, you need to make sure you can afford to pay the excess in the event of a claim.
10. Do you have any no claims discount (NCD)?
Again, as with car insurance, building up a few years’ worth of NCD can bring down the cost of cover by as much as 70%. So always think twice before making a claim, particularly if the cost of a claim comes to little more than the cost of your combined excess, as it may be worth footing the bill yourself rather than losing your NCD.
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