Ensuring that you have good quality home insurance in place can be difficult, as this type of cover can be confusing. This blog will break down all the elements of home insurance, and the add-ons available.
Your home is your sanctuary, and it should be protected appropriately. Defaqto is an independent service that compares financial products; they study the financial market and compare the features and benefits of the policies, and give it a star-based rating, (five stars being the best, and one star being the worst). The more stars a policy has, the better cover it provides.
Buildings Cover:
This covers the cost of repairing damage to the structure of the property. The minimum amount you should insure is the full reinstatement value of the property (this includes everything from demolition/site clearing, labour and materials, fees for surveyors, architects etc. to alternative accommodation), which can make this value much higher than the actual value of the property if you were to sell it. The re-build value can be found via. a home survey or the BCIS website. Most 5* defaqto policies provide blanket cover which can be more than you need.
Buildings cover is MANDATORY where you have a mortgage; if you do not have this cover in place, you are in breach of your mortgage conditions.
This type of cover also insures fittings deemed as permanent, such as kitchen units, built-in appliances, sinks, bathroom fixtures, as well as solar panels.
Basic cover protects against fire, storm, flood and theft (extras dependent on provider), as well as total devastation claims, for example if your house is destroyed by fire. An insurance assessor will be sent out to assess the damage and value the claim. If you are under insured, this could be costly; for example if your home cost £200,000 to rebuild, but you only had a sum insured of £100,000 on your policy, this could have devastating consequences.
Contents Cover:
This covers all moveable items within the property. Imagine turning your house upside down and seeing what falls out – these items are classed as contents. This section of cover also insures carpets, blinds and curtains which wouldn’t fall out but are moveable.
Making sure you have the correct amount of cover can be assessed by taking a room-by-room inventory, keeping receipts and taking pictures of expensive items and getting items valued regularly.
Contents cover is optional however we always recommend you protect your household goods and personal effects as they can be costly to replace.
Basic cover protects against fire, storm, flood and theft. Extras are dependent on provider, but can include lock replacement if keys are lost, freezer contents, contents in the open such as garden furniture.
Most quality insurers offer cover on a new for old basis; this means that when you damage something or if something gets stolen, they provide you with a brand-new version of that item. Not all insurers offer cover on this basis, so double check if your provider does, and make sure you are basing the sum insured on buying the item brand new. It doesn’t matter if you have an old television that’s now worth £100, or an old sofa that you could get from the charity shop at £200; if a brand new television is £400 and a brand new sofa is £800, these are the amounts you should add to your contents insurance value. If the brand of television you have no longer exists, the insurer would provide a similar alternative.
Excess:
Policy excess is the amount you pay when a claim is made. There are 2 types of excess:
- Compulsory Excess: set by the provider and the minimum you must pay.
- Voluntary Excess: set by you to pay on top of the compulsory excess.
Adding voluntary excess can reduce your home insurance premium (cost), however do not add too much! Claims will be rejected if the total excess is higher than the cost of the replacement or repair.
The excess is higher on claims that are deemed more serious, for example escape of water, subsidence, landslip and heave. You will need to check your policy documentation for full details of your excesses.
Home Insurance and The Add-Ons:
Accidental Damage:
This covers you against unintentional, one-off incidences that harms your property and/or its contents.
Most quality insurers offer basic accidental damage as standard. This would insure accidental damage to things like fixed glass, sanitary fixtures, cables and underground pipes under buildings cover, and audio and visual equipment, under contents cover.
Extended accidental damage can be added to both buildings and contents cover. We always recommended this as most claims fall into this category. Humans can be very clumsy! This extended cover can insure popular mishaps such as a nail/screw into a pipe, paint on the carpet or sofa or a foot through the ceiling.
Home Emergency Cover:
This covers against sudden and unforeseen incidents in the home, which exposes risk to health and creates loss or damage to the home making it temporarily unsafe.
Examples include: no heating, power or hot water, drainage issues e.g., blocked toilet, pest infestation or the property is unsecure e.g., a broken window or lock.
This feature can be used 24/7 with unlimited call outs. Ensuring that whatever the issue is, it is solved promptly.
Most quality insurers will also include alternative accommodation, meaning that if the emergency means you cannot stay in the property. You will be accommodated elsewhere e.g., a hotel.
Legal Expenses Cover:
This covers a specified amount of legal costs.
Legal examples include: pursuing/defending claims relating to employment, personal goods/services, personal injury due to accident or clinical negligence. Breach of rights in respect of your home or neighbour disputes (noise complaint, boundary issues).
Personal Belongings (kept within the home):
Most quality insurers will include a basic valuables limit to protect items under a certain value kept within the home.
Higher value items should be specified individually on your policy to ensure they are insured to their full value, such as jewellery, watches, musical instruments etc.
Personal Belongings (taken outside the home):
This covers personal items worn or carried outside of the home. It insures against theft. Accidental loss and accidental damage when out and about.
Items under a certain value can be insured together as ‘unspecified items’. Individual cover limits vary by provider.
Higher value items should be specified individually on your policy to ensure they are insured to their full value when taken outside of the home.
You can also include cover for money/credit cards, bicycles and other high-risk items such as sports equipment.
We hope you found this blog useful and we would be delighted to assist you next time you are shopping around for home insurance. To book a meeting with an adviser. Please call us on 01455 63 61 63 or click here to view our availability & book yourself in.
https://onerooffinancial.co.uk/contact/
Blog written on 26/11/2024
The information contained within this blog was correct at the time of publication (26/11/2024), and is subject to change.
