As our homes are the most important asset that we are ever going to own, it is imperative that adequate home insurance is taken out for your property. You will never know when you will need to claim under your home insurance so it is best to make sure you are covered properly.
Statistics show that 1 in 4 people in the UK will get burgled during their lives but people still choose to ignore this and don't get any protection whatsoever. Other unforeseen circumstances such as floods and fire may also wreak havoc among your possessions and by not getting covered properly you are taking a big risk in losing out financially.
There are two types of home insurance;
Buildings insurance is a mandatory condition when taking out a mortgage and lenders will insist that this insurance is in place. This will protect the house being damaged from events which cannot be repaired.
Contents insurance is not usually a mandatory requirement when taking out a mortgage, but it is in our own interest to secure your personal belongings as you have worked hard for them and if anything was to happen then you will be kicking yourself.
Remember, there are many home insurance providers out there and looking for the best cover for your house is important because after all it's your possessions and looking after them should be paramount
You must be careful with this - make sure that you do not insure your buildings for the market value of your property. You are insuring against the fact that the building has to be demolished, the site cleared and then your property rebuilt. You wont have to buy the land again, so as a result the rebuild cost is typically much lower than the market value. If you insure for the market value you are wasting your money and over insuring yourself! More information on rebuild costs can be found from the Association of British Insurers website http://www.abi.org.uk
You would be wasting your money, by lying on the proposal form you would invalidate the contract between the insurer and yourself, so no part of the policy would be valid. This also means that if you have a mortgage on your property you are probably breaching your mortgage lender's terms and conditions by not having insurance in place.
IPT means Insurance Premium Tax. This is levied on insurance policies sold in the UK. Household Insurance is subject to IPT at 5%, Travel Insurance is taxed at 17.5%.
In order to buy insurance you must have an 'insurable interest', basically you have to own whatever it is you are trying to insure. In this case if you rent your accommodation you will not, in most circumstances, own the building. As a result you cannot insure it, you can only insure your own personal belongings within the building.
Insurers will apply a clause in your policy called average. Essentially this means that if you insured your contents for £20,000 and they were actually worth £30,000, you are underinsured by 1/3. As a result if you put in a claim for £10,000 the insurers would only have to pay you 2/3 of the claim (assuming it was valid etc), therefore you would receive a claims settlement of £6,666, not the £10,000. As a result it is important that you insure for the correct amount. Underinsuring will result in any claims being restricted on their payout. This clause is very common in domestic policies, but not many people actually know about it... until they have to claim and have got their sums wrong...don't say you've not been warned!
Basically your house contents are anything that you would reasonably take with you if you moved - your bathroom suite wouldn't be considered to be your household contents for example. Another way of thinking about it is to imagine picking up your house and shaking it - everything that would fall out is considered to be your contents.
New for Old means that the insurance company will replace the item you are claiming for with a brand new one of the same make and specification.
This can be considered as jewellery, articles containing gold, silver or other precious metals, cameras, binoculars, watches, furs, paintings and other works of art, collections of stamps, coins and medals.
Legal cover is not usually compulsory on home insurance, but this can provide you with legal assistance for personal injury cover and consumer disputes. So for example, if you walked past a building site and were hit by a brick, the insurance company could pursue a claim on your behalf against the building company for personal injury.
This information would be available on your Policy Schedule and the amount can be chosen prior to application.
Your contents, personal effects, fine art, antiques, jewellery and watches are insured against loss or damage - including accidental damage - while you're at home or anywhere in the world.
Personal effects are property used for domestic purposes or for occasional business use. You or your family should either own them or be legally responsible for them.
They can include:
clothing, including motorcycling suits, furs, glasses, contact lenses and hearing aids, baggage and other items carried about the person, photographic and mobile phones, electronic equipment, sports equipment and bicycles, musical instruments
Independant Financial Advisor
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