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There’s No Place Like Home
Besides being the biggest financial commitment you’re ever likely to make, your home is probably the place where you feel most comfortable, spend most of your time and store your most treasured possessions. So regardless of whether you rent, own or share your property, it needs to be well-protected. Taking out appropriate insurance is a way of safeguarding your home and your belongings against whatever life might throw at you. From minor mishaps like a burst pipe or broken window, to major upheavals like a house fire or burglary, the right cover makes sure you don’t end up in debt or severely out of pocket.
Before you get bogged down in the details of different benefits, you need to be clear on what type of home insurance is right for you. And as a general rule, there are two types of cover:
Most types of buildings insurance will pay for damage to your home due to flood, fire and subsidence. You should always check the total sum insured (maximum payment for rebuild), as this can vary from one provider to the next. You should also be aware that the criteria for individual claims can be very different, and some policies may even exclude damage caused by floods if you live near water.
In order to know how much buildings cover you need, you need to know the rebuild cost of your property. And it’s worth taking the time to find out, because it’s likely to be one of the first questions you’re asked by your insurer. Be mindful that if you get the figure wrong, you can easily end up underinsured or paying too much in premiums.
ALTERNATIVE ACCOMMODATION (for you and your pets) - Some policies will cover the cost for you and your pets to be put up in alternative accommodation while insurance repair work is carried out on your property.
TRACE AND ACCESS - Not all policies will cover the cost of removing and replacing parts of your building to find and repair water or oil leaks. Others only pay for repairing the leak itself. Rather than completely fixing the problem, this can leave you with multiple holes in your walls, ceilings and floors… and a hefty bill to put it right!
REPAIRS FROM APPROVED TRADESMEN - If your kitchen caught fire because a pan was left on the stove or if an electrical device malfunctioned, buildings insurance could cover organising approved tradesmen to repair the damage to your buildings caused by the fire or smoke and redecorate the affected rooms. This is an additional benefit to look out for with a more extensive policy.
ACCIDENTAL DAMAGE COVER - If you want to protect your home against DIY disasters, such as a nail through a pipe or a foot through a floorboard, accidental damage cover makes a lot of sense. It can include cover for accidents to kitchens, fitted wardrobes and bathroom suites.
HOME EMERGENCY COVER - If you were in a situation where your home becomes uninhabitable and you’re frantically phoning around for a reputable plumber, joiner or electrician, home emergency cover could be just what you’re looking for. It's designed to provide a quick, short-term fix to prevent further damage to your home in the event of an emergency.
LEGAL EXPENSES - You might get some legal cover included on your policy as standard, but when you take it out as an optional extra, it tends to be more substantial than the basic included cover. It can cover anything from employment disputes and personal injury claims, to tax enquiries not to mention legal issues with your home! Be sure to check your documents to see exactly what you're covered for.
Is there anything unusual about your property? If it has a thatched roof, a specialist heating system or any unusual features, or even if it's just unoccupied long-term, you may need specialist insurance or additional benefits to your policy. A financial adviser would be able to offer the best guidance on these sort of areas.
Whether you rent or own your property, contents insurance covers personal belongings within your home - from furniture, toys and sports equipment to clothes, jewellery and TVs. Generally speaking, if you imagine turning your home upside down, your contents insurance would cover everything that falls out.
Buildings insurance is extremely important if you own your own property or have a mortgage. It covers the cost of structural damage to your home, including fixtures and fittings such as walls, floors, pipework and electrics, and also includes any fitted kitchens or bathrooms.
Most types of contents insurance will cover you against loss or damage due to theft, fire, explosions, storms, flooding or water leakage, plus other similar issues. But all of these benefits generally come with maximum limits and individual criteria that can vary from one policy to the next. So don’t take anything for granted.
When you take out any contents insurance policy, it’s important that the total sum insured is enough to cover all of your belongings. So it’s worth taking a few minutes to work out the estimated value of your belongings. Often policies offer up to £50,000 cover as standard and may allow you to increase this further as an optional extra. Plus, they usually have a ‘personal possessions’ limit, which can be anything from under £10,000 to over £20,000.
Like all insurance policies, the details make all the difference. So before you sign on the dotted line, there are a couple of benefits you should always look out for on your contents cover:
‘NEW FOR OLD’ REPLACEMENT - Many contents policies replace damaged or stolen items with a brand-new equivalent (or its monetary value). So, if your three-year-old TV falls off its stand and breaks, it’s replaced with a new one of the same make and model. Less substantial policies only offer the value of the TV based on its current age, which is likely to be considerably less.
BUSINESS EQUIPMENT - Some policies even provide cover for accidental damage to computer equipment as standard. So, if you spill your morning cup of coffee over your laptop because you haven’t quite woken up yet, you’ll be covered for it to be fixed or replaced where the item cannot be economically repaired.
COVER FOR HIGH-VALUE ITEMS - Most policies indicate a maximum amount you can claim for any individual item if it’s lost or stolen. Anything worth more than this is likely to need flagging with your insurer to avoid any problems when making a claim.
ACCIDENTAL DAMAGE COVER - Although accidental damage cover is included as standard on some policies, it is often limited to specific items such as TVs, computers and video equipment. For full accidental damage cover, you usually have to pay extra. Still, it’s well worth considering if you’re worried about everyday mishaps such as spilling wine on the sofa or paint on the carpet.
PERSONAL POSSESSIONS COVER - Most policies include an option to cover your personal possessions while on the move or in different locations. This is a sensible addition if you carry valuable items such as jewellery, mobile phones or sports equipment. But remember to check the cover limit, as some providers offer a higher maximum than others.
HOME EMERGENCY COVER - Home emergency cover can give you round-the-clock support and 24/7 access to approved tradesmen following a domestic disaster, providing a quick short term fix to prevent further damage to your home.
LEGAL EXPENSES - If your new carpet was fitted badly and the retailer refuses to sort the problem, legal expenses would normally cover legal advice and your legal costs. This could be anything up to a maximum of £100,000 and often with no excess to be paid.
What’s the No Claims Discount (NCD) on the policy? Some policies will offer up to 9 years NCD, which can lead to significant savings if you avoid regular claims.
Whether you’re renting out your old flat or a whole string of high-end properties, traditional home insurance is unlikely to provide the right cover to protect your investment. Instead, you need specialist landlord’s insurance. As well as protecting your buildings and contents against loss and damage, it can safeguard you against problem tenants and other unforeseen costs associated with being a landlord.
Landlord’s cover is offered on a buildings only or buildings and contents basis and covers you against loss or damage due to theft, fire, explosions, storms, flooding or water leakage and other similar issues. It can also include additional benefits such as cover for loss of rent and landlord’s liability, which insures against the cost of any accidents or injuries relating to your property.
LOSS OF RENT- Most policies include a benefit that covers you for loss of rent while insurance repairs are taking place. But don’t confuse this with loss of rent when you are unable to find a tenant – that is something else entirely!
ALTERNATIVE ACCOMMODATION FOR TENANTS - More extensive policies will cover the cost of alternative accommodation for your tenants while insurance repairs take place.
LOSS OF RENT - OR ACCIDENTAL DAMAGE TO LOCKS - Here's one you might be more familiar with. If you’ve ever had to replace the keys in your property, you’ll know that it can be really quite expensive. It’s worth finding a policy that covers the cost of damaged locks or stolen keys as standard, as it can be a real bonus.
ACCIDENTAL DAMAGE COVER - Tenants don’t always pay the same care and attention to your property as you would yourself. If you’re worried about slips, spills and breakages, accidental damage cover could be the perfect solution. As with traditional home insurance, it covers a variety of things from a nail through a pipe or a foot through a floorboard, to red wine spilled on your carpet.
LEGAL EXPENSES & RENT GUARANTEE - Legal expenses will help you in the recovery of any legal costs should you need to evict a tenant. Whilst rent guarantee would help you recoup the rent whilst going through the eviction process and for up to two months after eviction, whilst you find a new tenant.
Don’t wait until your renewal before speaking to your financial adviser about home insurance – let them do the research in advance, so that they can have everything ready for you when the time comes! Request a call back to get your journey started.