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Okay, so
you’ve managed to get your foot on the property ladder - you may
have even moved up several rungs - and filled your home with
lovely things you adore. So it’s perhaps judicious to insure not
only the bricks and mortar but also its contents.
Home insurance breaks down into two distinct types: buildings
insurance and contents insurance.
You can buy a single policy that covers you for both, but it’s
best to treat them as two separate policies: the cheapest insurer on
the house might not be the cheapest for the contents.
Instant Home insurance Quotes
This is often a condition of the lender giving you a mortgage
so, in the event of a disaster, it can be repaired or rebuilt. If
you don’t have buildings insurance and your house burns down, the
lender will have no collateral for its loan, so will call it in.
In which case, not only will you be homeless, but you’ll still
owe the lender the value of the mortgage. Because so many lenders
have suffered this, they now insist you provide proof of the
buildings insurance.
The lender will ask you to cover the property for the rebuild
cost, which should be noted in the survey.
In most areas of the country this will be
considerably less than the market value of the property.
What it covers
As a matter of course, most buildings insurance policies cover the
fabric of the building, including built-in kitchen units and
bathroom suites, outbuildings, including sheds and garages, and any
walls, gates or fences.
These tend to be covered against damage or destruction caused by
fire, storms, theft, vandalism, escaped water, flooding and
subsidence.
Some also offer accidental damage as standard, but in most cases
you will have to pay extra for this cover.
This is the element that covers damage caused by, for example,
drilling through a pipe. So if you plan to do any DIY on the
property, it's well worth considering.
The cost of adding on this type of cover will vary, as will the
cost of the basic policy, as insurers base their premium
calculations on a number of factors.
How much it costs
The main factors are the age of the property, postcode, age of
policyholder, number of bedrooms and type of property. Generally,
the cheapest type of property to insure is a semi-detached house.
When you sign up for a mortgage the lender will ask you if you
want to sign up for its buildings and contents cover. This is
unlikely to be the cheapest cover.
Instant Buildings Insurance Quotes
This insurance is optional but it's not a good idea to skimp. In the
12 months before September 2002 it is estimated that there were 991,000 burglaries in
England and Wales*, and there are many other ways you can lose your
possessions.
*Source - British
Crime Survey 2001/2
Contents insurance covers the things that aren't part of the
fabric of your home, such as furniture, electrical equipment and
clothes. It also covers curtains, carpets and things in your garden,
and most polices also cover the contents of your freezer.
As with buildings insurance, most policies pay out in the event
of a burglary, vandalism, fire, storm and flood, and premiums are
calculated according to the type of property you own and its
location.
However, contents insurance is perhaps more complicated to buy
than buildings insurance because of the large number of items most
people have in their homes and the wide range of scenarios covered
by insurers.
Accidental damages
Accidental damage cover is available on contents insurance policies.
This will protect you against things like paint spillage and damage
caused by pets, so it's a good idea to take it if you plan to
redecorate or have a cat that loves to scratch furniture.
Adding this cover usually costs extra, although some insurers
include some level of cover as a matter of course.
You need to look closely at the policies on offer if, for
example, you work from home.
Some insurers automatically cover up to £5,000 of home office
equipment. This kind of cover built into a standard policy should be
fine if you work alone and at your computer, but if your employment
involves specialist equipment, or you employ other people, you need
to speak to insurers about more specialist cover.
Valuable items
If you have valuable items you may need to add extra cover, or
consider a separate policy, as most policies cover valuable
individual items only up to a specified limited.
Items that are particularly tempting to thieves - for example
laptop computers that are frequently taken out of the house - may be
better covered under a separate policy.
This is because, if you have the computer stolen and make a
claim, you may find your home insurance premium goes up as a result.
Keeping the cover separate means you won’t pay more to cover the
rest of your property because you’ve had something stolen outside
your home.
Any security measures you add to your home will also have an
impact on the cost of buildings insurance.
A burglar alarm it will significantly reduce your premiums, and
if you have double-glazing with key-operated window locks, this will
also reduce your premium.
Instant Contents insurance Quotes
For Buildings &
Contents Insurance, we usually offer products from a
selected panel of providers.
Your home may be repossessed if you do not keep up repayments on your mortgage.
You can choose how we are paid: pay a fee, usually 0.5% of the loan amount; or we can accept commission from the lender.
The FSA do not
regulate some forms of mortgage.
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