Blog written on 12/04/2023
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.
High-quality cover from a 5* defaqto rated provider is always recommended; your home is your sanctuary, and it must 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 and at higher cover amounts.
Home Insurance and the Add-Ons Explained Buildings Cover:
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 anyway.
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 got destroyed by lightning or a storm, or your entire property sets on fire leaving nothing behind, the insurance assessor will come out to assess the damage and look at what everything was worth. If you are under insured, this could be costly; your entire building could cost for example £200,000 to rebuild, but if you only have a sum insured of £100,000 on your policy, this means that you could be left without a home.
Home Insurance and the Add-Ons Explained Contents Cover:
Covers all moveable items within the property. Imagine turning your house upside down and seeing what falls out! 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, taking pictures of rooms as evidence, and getting items valued regularly.
Contents cover is optional however we always recommend you protect your household goods and personal effects.
This type of cover also insures carpets, blinds and curtains.
Basic cover protects against fire, storm, flood and theft. Extras are dependent on provider, but could include lock replacement, freezer contents, garden, contents in the open etc.
Most insurers (especially good quality providers) 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 insurance value. If the brand of television you have no longer exists, the insurer would get you a similar alternative.
Home Insurance and the Add-Ons Explained Excess:
Policy excess is paid when a claim is made. There are 2 types of excess:
- Compulsory Excess: set by the provider that you MUST pay.
- Voluntary Excess: set by you to pay on top of the compulsory.
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.
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.
Covers against unintentional, one-off incidences that harms your property and/or its contents.
Most insurers (especially good quality providers) offer basic accidental damage as standard. This would insure things such as fixed glass and sanitary fixtures, cables and underground pipes with the buildings cover, and audio and visual equipment, glass mirrors, damage caused by professional movers with 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 in a pipe, paint on the carpet, stain on the sofa, foot through the loft and a broken vase/ornament.
Home Emergency Cover:
Covers against sudden and unforeseen incidents in the home, which exposes risk to health and creates loss/damage to the home making it temporarily unsafe.
Examples: no heating, power or hot water, broken window or locks, drainage issues e.g., blocked toilet, pest infestation, property is unsecure (broken window).
This can be used 24/7 with unlimited call outs, ensuring that whatever the issue is, it is solved promptly.
Most insurers (especially good quality providers) will also include alternative accommodation within this cover, meaning that if the emergency means you cannot stay in the property, you will be able to stay elsewhere e.g., a hotel.
Legal Expenses Cover:
Covers an amount of legal costs.
Legal examples: 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.
Home examples: neighbour disputes (noise complaint, boundary issues).
Personal Belongings (within the home):
Most insurers (especially good quality providers) will include a basic valuables limit to protect items kept within the home.
High-value items should be specified individually to ensure they are insured to their full value, such as jewellery, watches, musical instruments etc.
Personal Belongings (outside the home):
Covers contents taken away from the home; insures against theft, accidental loss and accidental damage.
Items with medium value can be added together and added to your policy under ‘unspecified items’. Individual cover limits vary between each provider.
High-value items should be specified individually 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.
The information contained within this blog was correct at the time of publication (12/04/2023), and is subject to change. https://onerooffinancial.co.uk/protection_services/buildings-contents-insurance/