Home insurance is a type of insurance that covers any damage or loss of property in the event of things like fires or floods.
High risk locations have higher prices but things such as approved locks, proximity to a fire station, having fire alarms fitted, fire sprinklers or anti weather measures such as hurricane shutters can all bring the price down.
Buildings insurance is not legally mandatory in the UK, but is an option you should consider as it will greatly help in the case that the worse happens. In addition, it is possible that some lenders will only offer mortgages on properties that have building’s insurance. For more information, you should contact your bank or building society and search insurance companies to find out what deals they can offer you.
Building insurance covers the cost of rebuilding, the cost of repairs in the event of a disaster such as flooding.
There are a myriad of different combinations and prices and price comparison sites can greatly help you to sift through the huge amounts of offers to find the one that is just right for you.
Often the coverage amount is lower than the property value, as in the event of a disaster, the building will be damaged but the land that it stands on is usually left unscathed.
Aspects of home insurance:
Drainage and plumbing cover is specifically used to cover water issues, such as supply, pipe bursting, freezing or blockage. It usually involves the insurance company sending out a qualified plumber to asses and fix the issue you have.
Electric cover protects you from electrical mishaps being a large expense by being covered for an electrician to sort the issue, from re-wiring to fixing light fittings, to replacing a damaged fuse box. This usually does not cover light bulb replacements however.
Fire insurance covers your property in the case it sets on fire. Usually up to a maximum amount based on the rebuild value of the property, the insurer will pay out to have it rebuilt, repaired, or as a sum to the owner.
Contents cover is an insurance that protects items and possessions. This can be from theft, fire damage or flood damage. There are several different general types, but each insurance company will likely have different criteria or cover offers, so as usual, shopping around will get you the best deal for you.
Indemnity policies pay out when an possession is broken or lost, but it takes into account wear and tear. So the payout reduces in value the older the possession is. Although the payout is often lower, the premiums needed to pay to begin with are lower.
‘As New’ or ‘New for old’ cover has higher premiums, but rather than paying the value of the item as it was when it was stolen or broken, you can be paid the price for replacing the item with an item equivalent to the product, but brand new.
You can sometimes get additional content cover that protects your possessions even more. These can include things like accidental damage cover in case you break a valuable vase, or a pet knocks over a TV etc. as this would not come under a theft, fire, flood etc. type of damage. A lot of the time possessions are only covered whilst in the property, so some insurers may offer to cover objects like phones that are taken off the property regularly. For an extra price, of course.
You need to be careful before taking out any policy, as the ins and outs of what is covered and what is not can be very particular, and you don’t want to be caught short. They may also only offer a certain sum to cover and item, even if that sum does not cover the total value of the item. Furthermore, you will probably need to keep the insurer up to date if your content value increases or decreases if, for example, you buy a fancy new car.
Keeping Insurance Prices Down
Insurance is going to cost you, but there are several general ways to try and keep the costs down:
Shop around and make sure you are getting the best deal to suit your needs before buying into anything.
Pay annually, not monthly.
Monthly charges usually add up to a sum greater than an annual lump sum. If you can afford it paying out in one go could save you some money, and it is also easier for you, as it will not be a constant drain on your monthly income.
Nearly all insurance has an excess that the insured has to pay before the insurance company payout. So on a loss valued at £1500 insured with an excess of £250, the insurer will only pay out £1250. These are usually measured by hundreds of pounds (£150, £200, £450 etc.) but will also bring down the premiums you have to pay.
No claims discount is a big part of insurance company’s dealings.
They often use this as a selling point, and so building up as much no claims as possible can bring your insurance prices way down. It may end up being more affordable for you, for example, to not claim and pay for a damage yourself, and keep your no claims down. This is more likely to help you on insurance that is a legal requirement, like car insurance, rather than optional insurance like content cover.
Combining insurances can help out.
By getting home insurance that covers content, for example, insurance companies may offer you lower prices than it would be to get separately.
Insurance companies are gambling with their money.
By making yourself less of a risk, you will be able to haggle better offers. By installing smoke alarms or better locks, you are less likely to suffer losses, or larger losses, so you could get lower premiums as a result.