Buildings and Contents Insurance
What is buildings and contents insurance?
Buildings Insurance covers you for the rebuild cost of your home, should it be damaged or destroyed by fire, storms, theft, vandalism, flooding, or subsidence.
Contents insurance covers things that aren’t part of the fabric of your home, such as furniture, electrical equipment, clothes, curtains, carpets, the contents of your freezer etc.
Why do I need buildings and contents insurance?
It is often a condition of your mortgage that you have buildings insurance – if you don’t have it and your home burns down, you will be homeless and you will still owe the mortgage company the value of your mortgage. Even if you don’t owe money on your house, it’s probably still an asset you could not afford to lose.
Whether you own your house or not, it is important to have contents insurance. If everything you own was lost in a fire, could you afford to replace it all? If your bath overflowed in your first floor flat, flooding your bathroom, and damaging your downstairs neighbour’s ceiling, could you pay out to have it all repaired? According to the British Crime Survey, there were 756,000 domestic burglaries in England and Wales between 2004/5. Can you really afford to risk losing your possessions?
What types of buildings and contents insurance policies are there?
- Buildings insurance
Most policies already cover not only the building, but also any built-in kitchen units and bathroom suites, any outbuildings including sheds and garages, and any walls, gates or fences.
You can add (usually at an additional cost) accidental damage cover to your buildings insurance – this would cover any damage that might be caused by you drilling through a pipe for example. If you are thinking of doing any DIY on the property, you should consider whether you could afford to pay out for any accidental damage caused.
The policy premiums vary mostly according to the age/location/type of property you own, as well as how secure your property is and your own age.
- Contents insurance
Contents insurance varies mostly according to the value of what you own, the age/type/location of the property they are held in, and how secure the contents are kept. You should keep a list of all your high value items, and the insurance company should know about these items too. Sometimes the insurance company might ask you to take specific action to protect certain valuables.
- New-for-old
This type of policy pays out how much you would need to replace the damaged/stolen items with new ones. This may increase your monthly payments, but if you added up what all your possessions are worth, and then compared that with what it would cost to buy all new possessions, there would most likely be a vast difference.
- Indemnity policies
In this type of policy, deductions are made for wear and tear, and depreciation. This may help to keep your monthly premiums lower, but you would have to find the difference when you buy replacement items.
- Cover for working from home:
If you have an office at home, some insurers automatically cover up to £5000 of home office equipment. If your work involves specialist equipment, or you employ other people, then you may need specialist cover.
- Cover for personal possessions
Some policies offer an added option of cover for items when they are used away from the home. This could include items such as mobile phones, handbags, rings, laptops etc. We can help you to decide which added options you need for your peace of mind.
- Caravan cover
You may be able to add your caravan and its contents to your home and contents insurance policy – we can help you find the best policy to suit all your needs.
|
|
