What To Consider Before Buying Home Insurance

Know What You’re Buying

“It doesn't matter whether you live in a one-bedroom flat or a five-bedroom detached house, it's important to ensure you have the right protection in place in case something should go wrong,” says Kevin Pratt from Money Supermarket. The most important thing to recognise at the beginning of the process is that home insurance is made up of two parts: buildings and contents. “You don't just need to insure the structure of your home; you also need to insure its contents against loss or damage caused by theft, fire, storms, lightning, flooding or other water leakage, as well as explosions or earthquakes,” adds Kevin.

Get Buildings Insurance First

“If you're a homeowner, then you're going to need buildings insurance,” says Tom Vaughan at Confused.com. It protects the structure of your home – including the roof, walls and windows – from events such as a fire or a falling tree, as well as other permanent fixtures inside the home, such as fitted kitchens and bathroom suites. Although not compulsory, it’s worth noting that most mortgage lenders will insist that you have adequate protection. The good news is you don’t need to provide any real documentation at the time of purchase, just some basic facts about your home, such as when it was built, how many rooms it has and what the walls are made from. Later down the line, a provider might ask you to calculate the rebuild cost of your home, which can be done using the Building Cost Information Service’s (BCIS) house rebuilding cost calculator. If you’re still in the process of buying a home, it’s good practice to have buildings cover in place when you exchange contracts, as this is the point at which you become financially responsible for the property. 

Take Care With Unusual Homes

Most homes in the UK have brick walls and a tile roof, but others are more unusual. “If your house is not of a standard construction, you will probably need specialist home insurance because a mainstream insurer will most likely refuse cover,” warns Kevin. The good news is most insurers agree on a common list of property styles which are defined as non-standard, including homes with a timber frame and flat roof. 

Count The Contents

The average home has more valuables than you might think, with Money Supermarket putting the value at somewhere in the region of £55,000 for a normal family of four – despite far lower estimates from its customers. “It's important to get the figure right so that your insurance will pay out in the event of a claim,” warns Kevin. “Walk round your house and make an inventory of your possessions – jewellery, computers, iPods – they can all add up to quite a sum. And don't forget the contents of your shed. Contents also include clothes, furniture, carpets and curtains,” advises Kevin. Read the terms and conditions as most insurers will limit pay outs for single items, and be sure to provide your insurer with all the relevant information – which might include professional valuations for items like jewellery. Skipping this step might allow your insurer to refuse to pay out.

Define The Cover

The contents portion of home insurance policies are generally referred to what’s known as ‘old for new’, which means a successful claim will pay out to replace the old item with a new version, in the right circumstances. Be careful if your insurer is offering a cheaper ‘indemnity’ policy offer to protect against everyday wear and tear. The eventual pay-out will only reflect the asset’s value at the time of the claim, rather than its value when new.