Household insurance is defined by two categories: Buildings Insurance and Contents Insurance. If you are a mortgage holder it is a requirement to have both policies, and for good reason.
A buildings insurance policy will cover the structure of the property itself as well as fixtures and fittings including bathtubs, toilets, and fitted kitchens. Buildings insurance also covers external structures such as garages and sheds. Depending on your policy, you may also be covered for external walls, gates, driveways, swimming pools, or any other building related extension.
Buildings insurance will typically cover your home in the event of fire, floods, subsidence, theft, or any number of domestic related disasters. Your policy will be based on the maximum amount it would cost to rebuild your home. Therefore, it is vital you have a proper survey done to ensure you are not under-insured if it comes time to make a claim.
Home contents insurance, as the name implies, covers the contents of your home in the event of theft, loss, or damage. The policy will cover items such as furniture, electronics, and possibly portable possessions such as cameras, jewelery, luggage, and other personal items. Typically your contents can be replaced as new or new for old however, you must be sure you understand exactly what your policy covers as insurers will vary what they replace.
Most home contents policies will cover your valuables in the event of fire, flood, theft, or acts of God. It is best to remember that some insurance companies may have limits on the full value they are willing to pay so be as specific as possible when it comes to itemizing expensive valuables such as televisions, cameras, jewelery, computer equipment, and so on.
Keeping Costs Down
* Shop around: Compare deals on line or speak to a qualified broker who can help guide you through the jargon and explain differences in policies relative to your needs.
* Read the fine print: Do not simply take the cheapest offer without comparing. A cheaper policy may appear tempting but may not provide the full coverage you need.
* Be sure you are not under-insured: Payments on a claim may be reduced meaning you will have to pay out-of-pocket if you do not have the appropriate level of cover. This is a common mistake and can cost dearly if you are not properly insured.
* Be pro-active: Prevent theft by installing burglar alarms and reliable safety locks on doors and windows.
* Flood measures: It may pay to install non-return valves on drains and to place covers over air-bricks. If you live in a flood zone, you will want to take every precaution to keep rates down.
* Fire prevention: Place smoke alarms in key locations such as halls, lofts, and landing areas. Having at least one fire extinguisher, ideally near the kitchen, will provide peace of mind and should lower your premium.
* Take care: Be sure your valuables are stored in a safe place and prevent unnecessary theft by leaving windows open or doors unlocked whilst you are away.
* No claims: Ask if the insurer offers a no-claims discount when renewing your policy. Many insurers will offer no-claims incentives that can save you money.
Explain to your provider the precautions you have set up and what level of discount might be available to you. Some insurers may offer a discount if you are willing to pay a certain amount of excess for all claims, no matter how they are caused.
Keep in mind it pays to shop around. Your best bet may be working with a certified insurance broker as they can walk you through the necessary steps to choosing the right provider and helping you keep costs down.
