Blog written 25/10/2023
Home insurance is important, but making sure you have the correct cover is even more vital. The consequences of not having the correct, high-quality cover can be detrimental.
Below are the top 5 things you need to know about home insurance.
5 things you need to know about home insurance
The cheapest policy is NOT always the best.
Home insurance is not an area where you should be looking to save money, and comparison sites do not comment on the quality of the cover. Ideally, you should be looking at policies that are 5* defaqto rated, as they offer the most comprehensive cover with the most generous cover limits. The higher the defaqto rating, the better the quality.
The buildings cover amount is NOT the property value!
You need buildings cover equal to the re-build value of the property to be insured. This is different to the market value because it takes into account other factors such as demolition/site clearing, labour and materials, fees for surveyors, architects etc.
If you are under insured, depending on which insurer you are with, they will either only pay out the amount you are covered for, or will cap the pay out at the percentage you are under insured by. For example if your rebuild value is £350,000 and you only have buildings insurance of £245,000. You only have insurance of 70% of the rebuild value. Therefore you would receive 70% of your cover amount which is only £171,500 in this example.
You can find the re-build value of a property by having it valued by a surveyor or using the calculator on the BCIS website. https://calculator.bcis.co.uk/
Accidental Damage is a key add on.
Although accidental damage sometimes has an additional cost, you should consider it. This can cover unintentional. One-off incidents such as drilling into a pipe whilst hanging a picture, stains or damage to a carpet or sofa etc. We can all be a bit clumsy, so having this cover will give you peace of mind.
You need more contents cover than you think.
Imagine tipping your house upside down; everything that falls out is classed as contents. Although carpets, blinds and curtains are also classed as contents. A good way to indicate how much cover you need is by valuing the contents of your home, room by room. Perhaps take an inventory. It’s important to make sure you are not under insured because as explained above, it may limit the amount paid out at claim.
Your treasured possessions may not be covered.
A policy will have a limit to how much it will pay for a single valuable (high risk) item unless it is named separately. This includes jewellery & watches.
For example, if the policy has a single article limit of £1,500, and your item is worth £2,000, it will need to be listed as a specified item.
It’s important to ensure that all high value items are named on the policy. Some providers have strict limits on high value items so ensure that you are honest when setting up the cover.
You can chose to insure valuable items inside the home only or inside & outside of the home.
With common items being watches & engagement rings, don’t wait until you’ve lost them to realise they aren’t adequately insured.
The information contained within this blog was correct at the time of publication (25/10/2023), and is subject to change.