A George Banco Guide To Insurance – Home Insurance
Insurance is important. Being covered by an insurer in the case of accident and emergency is a critical part of modern life. But when you’re starting out it’s a little difficult to understand what insurance we need, whether it is mandatory or not, or whether we are eligible for it.
So, in order to make this a little less difficult, we’re going to provide a short series of articles covering insurance, and hopefully this will make things a little easier for readers.
First of all let’s look at home insurance – a term that covers both buildings insurance and contents insurance. These two types of home insurance can be bought independently or as a joint policy from a single provider designed to cost less.
Home insurance costs can be reduced by increasing home security, installing better alarms, building a no-claims bonus, or increasing the excess on the policy. Increasing excess means that if you are happy to pay more when you make a claim, your yearly premiums may be lowered.
In summary, buildings insurance is a policy which covers the cost of rebuilding or repairing the structure of your home in the event of fire, theft, falling trees, attempted theft, vandalism, storm, smoke, flooding, lightning, land subsidence, explosions and vehicle collisions. These are sometimes known as an ‘acts of god’ although the term is less common these days.
On the flip side buildings insurance doesn’t cover general wear and tear on your home and if you wish to go about improving your home you must update your buildings insurance first. It also doesn’t cover damage from insects, birds and leaking gutters. Frost is also not usually covered, unless it causes damage via burst or frozen pipe.
Buildings insurance is also a legal requirement if you own your home – mortgage providers normally insist you have it before they lend you money for a mortgage. The most obvious advantage of buildings insurance is that it can save you massive amounts if your home is damaged out of your control by some kind of unexpected accident. This means you won’t have to worry about being driven out of house and home.
This type of home insurance covers everything inside your home, such as your clothes, furniture, valuables and electrical goods. It provides a safety net in case of fire, flood or theft, so your items can be replaced if their loss isn’t your fault.
Different policies offer different levels of cover – there are also additional cover options such as optional ‘Accidental damage cover’ and ‘Personal possessions cover’ which protects items you take with you outside your home – sometimes even when you take them abroad.
However, contents insurance doesn’t cover very expensive items (usually over £1500), and it doesn’t protect you from wear and tear on items either. It also doesn’t cover computers damaged by viruses.
As a final note, if you’re renting a property you definitely won’t need buildings insurance, that’s up to your landlord, but you can apply for a form of contents insurance known as ‘tenants cover’ to safeguard your stuff. Tenants looking to do so should Google ‘tenant’s contents insurance’ for more info.
Join us next article for a look at car insurance – a rough guide to all three different types!