Unlike car insurance, home insurance isn’t a legal requirement. However, it is an extremely sensible investment, and one that’s insisted upon by many mortgage lenders. A good home insurance policy will provide peace of mind, and protection against sudden losses brought about by damage, theft, and fires.
Understanding the Basics: Types of Home Insurance
Home insurance comes in two basic types. There’s buildings insurance, which covers the building itself, including the walls, roof, and windows. Then there’s contents insurance, which deals with all of the possessions you’re storing inside the home. Think furniture, appliances, and decorations.
There’s also a third type of insurance, which covers you against legal liability created by your home. If you bring an outsider, like a guest or a tradesperson, into the home, and they then suffer an injury, then you might be found legally culpable. Insurance can protect you against this liability.
Many home insurance policies bring together all of these forms of cover into a single product. Make sure that you read the small print, and that you understand exactly what you’re getting.
Assessing Your Coverage Needs
The more risk that the insurer is assuming, the more they’ll want to charge you to cover the costs. That means getting an appropriate level of coverage is important. Think about how much your valuable items might cost to replace, and how much the home might cost to rebuild.
Certain high-value items might require extra coverage, which you can either bolt onto your existing policy or access via a separate one. It’s often important to get these expensive items valued, so that you can get as much as you deserve when you make a claim.
Tips for first-time buyers on home insurance
Getting the best from your home insurance is vital when you’re a first-time buyer. Make sure that you compare the various policies on offer. How much are the premiums, and how much will you be expected to hand over as an excess in the event of a claim? What’s covered and what isn’t?
When choosing the right home insurance policy, it’s essential to consider not only the premium costs but also the level of coverage, excess amounts, and any exclusions that may apply.
Make sure that you’re comparing policies on a like-for-like basis, and that you consider the reputation of the insurer in question, and the experience of their existing customers. It’s often worth paying a little bit more for the peace of mind that comes with knowing you’ll be taken care of in the event of a claim.
Guide to insuring your first home
The price of the average home is rising, as is the cost of materials and labour. As such, the costs faced by insurers are being pushed up – and these costs are being passed to homeowners via premiums.
You can drive down the cost of home insurance by taking measures to limit the risk. Look for homes in low-crime areas, away from busy roads. Make sure that you take insurance and fire safety seriously. Many insurers will offer discounts to buildings with extra alarm systems and security cameras.
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