Everything You Need To Know About Home Insurance
Taking out home insurance isn’t as easy as it sounds. Here are some things you’ll need to know to get the right cover for the best price.
#1 Homeowners require buildings insurance, but everyone must have contents insurance
The type of cover you require depends on whether you rent or own your home. In general, homeowners and landlords need both buildings and contents cover, whereas those renting usually only require tenant’s contents cover.
#2 Don’t over-cover buildings
A common mistake when taking out buildings insurance is to cover the property’s market value (i.e the amount it would sell for), instead of the rebuild value (how much it would cost to rebuild the property). This should not only cover the cost of materials, labour and architects for your area, but also the cost of accommodation while your home is being rebuilt.
The best way to determine the rebuild value of a home is to commission a survey, but this can be expensive unless you’re getting one anyway (e.g. if you’re buying a new home). A cheaper and quicker option is the Association of British Insurers’ calculator, but keep in mind that this is also less reliable.
#3 Don’t under-cover contents
Under-insuring the contents of your home could mean you don’t receive the full value of the items if you ever need to make a claim. To avoid this, add up the value of everything in your home, even smaller things such as old clothes. It’s better to be safe than sorry.
#4 Good locks are worth the investment
Spending the time researching and learning about the different types of locks is definitely worthwhile, as choosing the right lock for your property could significantly reduce your insurance premium. Spending the money on good quality locks could actually end up saving you money.
#5 Adjust your excess to lower your premium
House insurance policies come with a compulsory excess. However, you can also choose to pay a voluntary excess on top, bringing the cost of your premium down. The more you pay, the lower your premium will be. But be realistic. Make sure the total excess is affordable, in case you do ever need to make a claim.
#6 Avoid monthly repayments
Pay-monthly options are nothing more than high-interest loans, so avoid them if you can. If you can’t afford to pay your premium in full, use a credit card with a low (or 0%) APR, but ensure your repayments are large enough to clear it within a year.
#7 Never auto renew
Insurers get away with charging existing customers more each year, since they know inertia stops policyholders switching. They usually offer the best deals to new customers, punishing existing ones with higher rates for not challenging them. So, keep a reminder of your renewal date, and call them up to negotiate a better deal when your cover is coming to an end.
#8 Is your child a student? Your policy may cover them too
If you have a child studying, and living away from home, they may automatically be included on your insurance policy, under its ‘temporarily removed from the home’ section.
Many policies have this cover (although it’s best to check yours), providing that your home is your child’s main permanent address (i.e. they’ll return upon completing their studies). However, note that this only applies while the insured items are at your home.
If you want cover for other items your child normally carries outside of your home (such as their laptop or mobile), you can add an ‘all-risks’ or ‘unspecified personal possessions’ section to your policy which covers your child’s belongings while they’re out and about. However, this will likely come at an additional cost.
Hopefully you find this guide useful when taking out your home insurance. If you have any further questions, you can get in contact with us here.
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