Introduction | Homeowners
| Buildings insurance |
Contents insurance | Level of cover
| Costs of cover |
Choosing a policy | Making a claim
| Tenants insurance | Landlords
insurance
Levels of COver
Regardless of whether you are buying buildings and contents insurance
separately or together, you should make sure that both elements
are sufficient to meet your needs.
Buildings insurance is the easier of the two to determine. Basically,
this must provide a sum assured that is enough to pay for the rebuilding
of your home. If you are buying a new home and have a survey done,
this figure will usually be indicated in the survey or valuation.
If you are unsure whether this is accurate, check with the builder.
If a lot of time has passed since you last determined the rebuild
cost or you have made significant alterations to the property (such
as a loft conversion or an extension), you should ask a reliable
builder to estimate the rebuild cost again.
Almost all contents insurance policies also put a limit on the
overall amount that you can claim, usually referred to as the sum
assured. For mainstream insurance policies, this is often set at
around the £30,000 mark. Some insurers are fairly inflexible
in that they have a range of standard policies with a set sum assured
and do not offer many options to customise the policy any further.
A large percentage of people severely underinsure their home contents,
often by as much as 50 or even 100 percent. This problem is particularly
acute with high value properties, where many high value items are
not included on policies individually, as they usually should be.
To decide what your minimum sum assured should be, make an inventory
checklist of absolutely everything you can think of that you have
in and around your home. Then calculate how much it would cost to
replace each of the items. This should include things that you have
made or built, been given or bought, as they would all need to be
replaced if they were stolen or damaged. You should also try to
include an approximate date on which the item was purchased and
gather together any receipts you may have. Making this list is an
incredibly tedious thing to do, as you will have to slowly go through
every room in the house, listing every item and then attributing
a replacement value to it. It is worth taking the time to do this
properly though, as you will probably be surprised at how high the
eventual total is.
Some insurers also put a limit on the amount you can claim for
individual items. You should look out for this in policy details,
where it will usually be called the Single Item Limit. It may be
a lower value than some of your possessions. Where this is the case,
you have three options:
Negotiate for the full value to be included in the policy.
Insure the item entirely separately.
Break the item down into component parts of lower value. Cameras
can have the lenses, main body and peripheral equipment insured
separately, for instance.
There are a few things that your policy may or may not include cover
for:
- Accidental damage
- Away from home cover (possessions, cash and credit cards whilst
you are away from your home)
- Cover for frozen food
Make sure your buildings insurance policy starts from the day
that you sign the contract, not from when you move in. If you do
not have buildings insurance and the house is struck by lightning
in between the time you exchange contracts and move in, it will
be you who is liable.
You should review your buildings and contents insurance fairly
frequently, and make sure that it is kept up to date with any major
purchases or alterations to your home. If you fail to inform your
insurance company of any building work you have done or expensive
valuables that you buy after you take out the initial policy, you
may struggle to recoup any money when you come to make a claim.
Further reading on levels of cover:
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