Household Insurance

There are two types of household insurance - buildings and contents. Home insurance is vital to protect the roof over your head and all your possessions. It's simple to arrange and acts like a shock-absorber, protecting thousands of families each year from the financial effects of life's unwelcome events like burglary, loss, fire and flood. Choosing from the hundreds of policies on offer can be bewildering and time-consuming. That's where using an adviser can be of real help in finding you the best and most suitable deal for your needs.

Buildings Insurance

This type of policy covers the bricks and mortar and permanent fixtures of your home. So, if it's damaged as a result of events like storms and floods, fire, vandalism or water damage from leaking pipes, your policy will cover the cost of repairs to your property.

The amount of buildings insurance you need should represent the cost to rebuild your home, not its full market value which can often be a lot higher. Your adviser will be able to help you calculate the right level of cover for a property of your type, size and construction. You will generally need to have buildings insurance in place under the terms of your mortgage loan, and you will be required to include the name of your insurer on the policy schedule.

Contents Insurance

Contents insurance policies are designed to cover your possessions from loss, damage or theft. Insurers define 'contents' as all those things that you'd take with you if you moved house. So, most policies include things like furniture, carpets, curtains, electrical goods, clothes and valuables such as watches and jewellery.

The cover available falls into two types: 'new for old' policies which means that, if for instance, something is stolen then the payout will be enough to buy an equivalent new item. Indemnity policies, which are often cheaper, payout a reduced amount if you make a claim as they take into account the wear and tear or the depreciation in the value of an item. So, if you lost something you'd owned for a while, you would get back the current value, not what it would cost to buy new.

The amount of cover you'll need, referred to as the 'sum assured' needs to be adequate for your needs so that you don't risk being underinsured. Being underinsured would mean that your insurer might restrict the amount they would payout in the event of a claim. Simply walking around your home with a notebook and pen can help you compile a comprehensive list of what you own. Don't forget to include those things you store away in cupboards, basements and attics too.

Valuable items away from home - You can get cover for belongings you have with you when you're away from home. When taking out a policy, you'll be asked if you require insurance for various items such as mobile phones, laptops, jewellery and cameras. There is usually a limit on the value of any one item, and you may need to specify the items you want to insure.

Cover for additional risks - For further peace of mind, many people opt to pay for additional cover under their policy. You can, for instance, add insurance for legal expenses, home emergencies, drains and plumbing, freezer breakdown, accidental damage to home contents and accidental damage for personal possessions away from home.

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