Building insurance cover is of most importance, if your house burnt down would you have the money to cover this loss. Mortgage providers insist that you have building insurance so that in the event of a disaster it can be repaired or rebuilt, as mortgage lenders will not want to be left without security for their loan.
A policy should cover funds to rebuild your home in the event of it being totally destroyed or damaged to the point that complete rebuilding is necessary. Some policies only cover market value, so be sure to check. The policy could also cover against damage caused by events beyond your control including:
This policy could also provide you the alternative accomodation if your home is uninhabitable. Do not simply opt for the cheapest building insurance quote available and think about your needs.
As well as the structure of the property, buildings insurance also covers permanent fixtures and fittings including fitted kitchens, baths, toilets, bedroom cupboards and interior decorations. The test is whether or not the fixture can be removed and take to a new home, for example fitted cabinets. Policies will usually cover outbuildings such as garden sheds, garages and greenhouses, but might not cover fences, gates, paths, drives, boundary walls and swimming pools.
Contents insurance gives protection to anything that is not a fixed part of your home, for example your appliances, electronic goods, furniture and clothing. Most home contents insurance policies will even cover the contents of your fridge and freezer. Policies are advisable for home owners and tenants while landlord contents insurance can be limited if the property is let unfurnished or part furnished.
Your home contents insurance could also include cover for some items you take away from the home such as bicycles or prams and even the contents of your handbag. Clothing items, watches and mobile phones can also be covered along with sports equipment-though this is not usually covered when it is in use. The key is to check your policy and never assume that items are covered.
Policies can also cover in the event of an injury in your home. Furthermore, some contents insurance policies would also cover for your legal liability if someone were injured in your home due to your negligence or lack of upkeep of the property.
In part four we take a closer look at the different levels of cover available.