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| Insurance Guide |
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This insurance guide has been compiled as an introduction to the types of cover available. You may find that not all insurance providers give the same level of cover as standard. As with any purchase, it's advisable to shop around and make sure you fully understand the product and are happy that it's what you want and need, before you buy it. |
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Buildings Cover
If you're buying your home with the help of a mortgage, basic buildings cover will be a condition of the loan, although it is always advisable to have this type of insurance. It covers the bricks and mortar of the property and fixtures and fittings that couldn't easily be removed; fitted kitchens and bathrooms for example. It protects the lender's security in that the insurance company will pay for the property to be rebuilt or repaired in the event of an insured risk, for example fire, flood or storm damage. You should also be covered for some accidental damage to glass and sanitary fittings.
The amount the property is insured for (sum insured) may not necessarily be the same as the market value because it has to include an amount for site clearance, architects fees and other associated costs. If the property is not detached, there may also be damage to adjoining properties which would have to be put right. A sum insured figure will be provided by the surveyor when you initially buy the property and will usually be increased each year by the insurer, in line with the retail pricing index. This is known as index-linking. However, it remains the property owner's responsibility to make sure the sum insured in adequate.
Additional cover
Accidental Damage
You can opt to take accidental damage cover on a buildings insurance policy which will cover you for damage caused accidentally to the property structure or fixtures and fittings. For example, while working in the roof space you may put a foot through the ceiling (loft floor) and this would only be covered under the accidental damage part of a buildings policy.
Contents Cover
This type of insurance covers the contents of the home - items that you would take with you when moving home. It is not a requirement of a mortgage or home loan, but it is advisable to cover your home contents against perils such as fire, flood and theft. You will need to tell your insurance company how much you want your contents insured for. It is a good idea to make a detailed list of the contents of each room in the house and see how much it would cost to replace each item. You will probably be quite surprised how much insurance you actually need. Most policies work on a "new for old" basis, which means the insurance company will pay for a new replacement, although an amount for wear and tear will probably be taken off the value of claims for clothing and household linen.
Additional Covers
Accidental Damage
Again, you can opt for accidental damage on your home contents. This would cover you for damage caused accidentally, for example accidental spillages of paint or bleach.
Personal Possessions Cover
This optional extra provides insurance for items damaged or lost outside the home, for example clothing, watches, sports bags and equipment. You will need to specify the amount of cover you want and any single claim will be limited to that amount.
Valuables
You can opt to have cover for valuables both inside and outside the home. This includes valuable items of jewellery. Again you will need to tell the insurance company how much cover you need and you will probably have to provide valuation certificates.
Bicycles
Cover for bicycles may not automatically be covered under your contents insurance and you would need to check with your insurer.
Travel insurance
Some companies provide annual insurance within a contents policy. A set amount will be charged for the year, for specified persons and for particular types of travelling, for example holiday only or business. This is particularly useful if you make several trips in one year.
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