No matter whether you are a home owner or you’re a tenant, you will need some form of home insurance. So how do you go about finding the right policy? And what can you do to reduce the odds of needing to make a claim?
The different types of home insurance
The first thing to bear in mind is that home insurance is a bit of catch all term for two different types of cover. There’s building insurance, which protects the structure of the property itself, and then there is contents insurance, which covers your belongings inside the property.
Contents insurance is an essential policy for everyone to have in place, while buildings cover is necessary if you are a homeowner. If you are a tenant, then it is up to the landlord to arrange the buildings insurance.
How much cover do I actually need?
Getting the amount of cover wrong can be a costly mistake - if you make a claim and the insurer determines that you had significantly too little insurance in place, then they can void the policy entirely, leaving you to cover the costs alone.
When arranging buildings insurance, the cover you need isn’t related to the value of the property, but rather how much it would cost to rebuild the property. The Royal Institution of Chartered Surveyors offers a Building Cost Information Service which can help.
As for the contents insurance, it pays to go through each room totting up how much it would cost you to replace everything in there.
Pick the right level of excess
A really important consideration for anyone taking out a home insurance policy is the excess. This is the amount that you agree to pay towards any claim you make. So for example, if you set the excess at £200 and then make a claim for £5,000 of repairs, you are committed to paying that first £200 of the repair bill.
The higher that you set the excess, the lower the insurance premium will be. But it’s important that you don’t overextend yourself by setting the excess at a level you would not be comfortable paying in the event that you do actually need to make a claim.
Look after your home
It’s important to remember that with buildings insurance - which covers the structure of the property, rather than the contents - the policy is only offered on the condition that the property is maintained regularly.
That means things like checking over the quality of your roof every year or so, replacing any locks that break on your windows and doors, clearing out your drains and gutters and acting swiftly if and when any issues appear.
This isn’t just about keeping your policy in place though. This form of home maintenance will help protect your home against issues like damp and flooding, and therefore reduce the chances of you needing to make a claim.
Improve your home’s security
Along similar lines, taking steps to improve your home’s security will also help you to avoid needing to make a claim.
This can take many forms, from going for more robust locks to installing a burglar alarm or some form of smart security device.
Avoiding accidental damage
The most common reason for making a claim on a home insurance policy is accidental damage. There’s not much you can do about being clumsy, but you can reduce the chances of accidents happening. For example, if you have small children running around, then ensuring there is nothing valuable for them to crash into is a sensible step.
DIY mishaps are a big cause of many home insurance claims too, so if you don’t have the technical skills needed for the job you have planned, get a professional to do it for you.
Keeping water where it should be
Another significant cause of home insurance claims is the escape of water, whether that’s from your pipes or your water tanks.
This is particularly timely as we head into the winter months, when the cold weather can lead to a jump in these claims. There are plenty of simple steps you can follow to reduce the chances of a water issue though, such as insulating your water tanks, fixing any dripping taps and getting your boiler serviced.
To find out more about ensuring your home and possessions are properly covered go to Solved.