The UK might be susceptible to rain, but we are rather lucky when it comes to natural disasters. Imagine living in New Zealand where your home is prone to earthquakes, or Australia where you house could get washed away in a flood, or in Florida where hurricanes batter the state for several months every year. Homeowners in these much pay ridiculous insurance premiums. But homes in the UK still need home insurance as we suffer from very different and often more frequent incidences that cause huge amounts of damage.
So why do we need home insurance?
Most mortgage providers these days will not give you a mortgage if you do not have adequate buildings insurance. However, it is not legally compulsory, but seeing as most people need a mortgage to buy a property, it is necessary by default.
What types of home insurance are there?
Home insurance is split into two parts. Firstly, there is buildings insurance, mentioned above. Buildings insurance covers the bricks and mortar, permanent fixtures inside your home and surrounding your property such as the garden fence. It also covers decoration inside your house such as the wallpaper and the paint, but not the soft furnishings; this is covered by contents insurance. The contents includes all the non-permanent fixtures such as TVs, microwaves and jewellery. Contents insurance is taken out in one lump sump, but most insurers stipulate that goods over a certain value must be individually listed on your insurance policy. Some contents insurance policies also cover goods when taken off of your property and can also include bicycle cover.
You can take out just buildings insurance or contents insurance if you don’t need a mortgage. However, it generally makes sense to buy combined cover. Legal & General for example, offer combined buildings and contents insurance that ends up being cheaper than buying two separate policies.
What kind of incidents does home insurance protect against?
Contents policies will cover theft, accidental damage to non-permanent fixtures and damage from fire, escaped water and flooding. Buildings insurance will cover damage to the actual property as a result of fire, flood, lightening, explosion, burst pipes, subsidence and falling trees or branches.
What are the most worthwhile optional extras?
Personal belongings cover is usually of a minimal cost and covers goods such as iPods outside and inside the home against theft or breakage. If you like doing DIY but aren’t exactly an expert at it, accidental building damage might be a good idea. This policy can cover against damage you cause to your own property accidentally.