Home insurance can offer an effective means of helping to protect your family’s finances, but unless you know your stuff when it comes to this form of cover, you could end up making potentially costly mistakes. It’s important to realize that the term ‘home insurance’ can be used to describe two different types of cover, namely buildings and contents insurance. This brief guide details both and should help you to understand your options.
Buildings insurance: the basics
If you own your own property, the chances are you’ll need buildings insurance. After all, banks require you to have some sort of cover in place as part of your mortgage agreement and many lenders offer property insurance. However, as expert brokers like Chill.ie note, you are not obliged to take out the policies offered to you by your bank. You’re free to shop around to find the best deal.
Buildings insurance covers the cost of rebuilding or repairing your home if it’s damaged. To find out how much this is, you can take a look at the survey or valuation report that was made when you got your mortgage. Under most buildings policies, you can make a claim if your property is affected by natural events like floods and storms and you can also seek money in the event of damage caused by fire, smoke, subsidence, vandalism, falling trees, water from leaking pipes and more. However, you’ll need to read the small print of policies carefully to see exactly what is included. Depending on the cover you get, you might also have financial protection for other structures around your house, such as driveways, garages and fences.
What to look for
When you’re comparing the range of buildings insurance policies available, consider things like how much excess you’ll be expected to pay if you make a claim, whether you’ll be provided with alternative accommodation if you can’t live in your house due to damage and whether you’re covered for faulty repairs. Bear in mind that policy providers offer differing levels of cover, so it’s important to check the details before you enter into agreements.
Contents insurance: the basics
Content insurance covers the possessions in your home for damage and theft. It can encompass everything from electronics and furniture to jewelry. Unlike buildings insurance, you won’t need to take this cover out as part of your mortgage agreement, but if you lack one of these policies, you could be placing your family’s finances in jeopardy.
When you’re calculating how much cover you need, it’s a good idea to make a list of the things you own and add up what it would cost to replace them. Also, you might need to insure any valuables separately. Check the ‘single article limit’ that cover providers apply to see if you’ll need this extra cover.
What to look for
As with buildings insurance, it’s always important to check the small print to make sure your policy meets your precise needs, and pay particular attention to details such as whether you’re covered for possessions you keep in your garage or shed. Also, bear in mind that you can take out additional personal possessions protection that provides you with cover for things like wallets and laptops that you take outside your home. Other optional extras include accidental damage and legal cover.
As long as you make sure you know the facts when you’re on the lookout for home insurance, you should be able to find the perfect policies for you.
