Home insurance, what is it? Do you need it? What do the most common terms mean? In this article we’ll explain in generic terms what you should know but it’s important that you check the policy details of any insurance product that you are looking at and ensure that it fits your specific needs.
Before discussing what to look out for when purchasing a home insurance policy lets first define what we mean by home insurance. Generally home insurance is an insurance that covers your home & your belongings, it is split into two parts: buildings insurance and contents insurance.
Buildings insurance covers the structure of your home, i.e. the actual building itself. This could cover you against events such as natural disasters and storm damage or fire damage, but as we said at the start you should check your policy to find out exactly what is covered. Contents insurance protects your belongings against instances like theft and in some instances, accidental damage.
You can buy buildings and contents as a standalone policy or purchase a combined policy, look out for policies with both included as this could save you money getting insurance from one place, some insurers may do deals for this but you should check with your policy provider first. Again, if buying a combined policy, you should check the cover levels suit your needs.
The Buildings insurance is generally intended to protect your home’s structure, including walls, roof, fittings and fixtures, doors and windows and sanitary items. This may also cover you if your home is damaged by fire, extreme weather, floods, earthquakes, falling trees, subsidence, car or aircraft crashes, water leaks or vandalism. You should always check your policy documents to see what is covered and what your insurance company classes as ‘extreme’ weather as this is not the same for all insurers.
Contents insurance will cover you for the items within the home and generally will be things like TV’s, laptops, clothes, and furniture, and could also include items such as gadgets, sports equipment, and jewellery depending on the level of cover the policy provides. To calculate these figures the costs of your home contents there are a couple of things you can do. Some insurers will ask you to use their ‘contents calculator’ or you can find one easily online by googling ‘home insurance contents calculator’. Or walk around each room of your home adding up the value of contents in each room. On occasion insurers will ask for receipts too so make sure you add up the value accurately and remember that even if something holds sentimental value but only cost you £5, you will probably only receive £5 to replace it.
Remember that unlike car insurance, home insurance is not compulsory, so having home insurance is not a legal requirement and some individuals are happy to self-insure. However, in some cases your mortgage lender may insist you have buildings insurance as this type of policy covers the cost of a complete rebuild if something catastrophic happens to your home which they have an interest in. You also do not need to buy your home insurance from your mortgage provider and should shop around for cover that meets your needs.
If the standard extras on a policy do not suit you, you do have the option to add optional extra cover to your insurance. These can include add ons such as accidental Damage & Personal Possessions cover, appliance cover and legal expenses cover.
Accidental damage on the buildings is a perfect example of DIY disasters this could be anything from hammering a nail into a pipe or falling through the loft. Accidental damage on the contents could provide cover from knocking over your TV to spilling wine on the carpet (again check the policy wording!). The cover can be added to your policy separately as an optional extra, but it will generally not cover damage by pets.
Personal possessions generally provide cover for items you regularly carry with you, such as the contents of your handbag, mobile phone or laptop and in most case covered away from the home to the value you specify when adding this as an optional extra. In some instances, items such as bikes are covered but it is important to note that a bike can also be covered whilst in the home, garage and shed, this would fall under your content’s insurance, this can also have a claim limit.
Non-standard home insurance is for non-standard buildings where a specialised policy may be needed. Home insurance is not limited to these options so if you needed something different there is cover for you. Cover is offered for unoccupied properties, buy to let insurance for landlords, specialist policies that will cover subsidence, landslip, heave, convictions, and flooding even if your property has a history of these.
We hope this helps you better understand home insurance and the different types of policies available. Check out our home insurance page for more information.
Disclaimer- Articles are for general information only – customers should always seek their own independent advice. GoSkippy is not affiliated with the organisations/businesses mentioned and does not recommend or endorse any of the included products or services. For more information please visit our disclaimer.