Home Insurance

In the United Kingdom today, it is a legal requirement to have in place a standard home insurance/buildings insurance policy. Home insurance is also sometimes referred to as buildings insurance however they are essentially the same thing.

 

Whether you arrange your home insurance through your existing mortgage lender or independently through the wealth of home insurance providers on the market today, it is of course vitally important that we are paying a competitive premium – whether this is paid on a monthly or yearly basis.

 

The internet is a great place to begin your search for a hassle free comparison of the market. It is firstly important to differentiate between home/buildings insurance and contents insurance. Although many insurance providers will offer such policies on a combined basis, it is not uncommon for people to arrange both policies separately. This illustrates the importance of shopping around still further for the most competitive cover.

 

When arranging buildings insurance it is common for the insurance provider to offer a ‘blanket’ cover – This is usually set at between £500,000 and £1m. This represents the rebuild cost – i.e. the cost of rebuilding the property in the event of serious flooding, fire, earthquakes and so on. As an extra feature on most home insurance policies, it is possible to select ‘accidental damage’ for an extra cost. 

 

In respect of contents insurance, it is common to select a level of cover in relation to the estimated value of the household items. For many people this is usually set at around £40,000. Other extra features can be included such as accidental damage and loss of money or other items outside of the property.

 

Finally, it is worth bearing in mind that when calculating the buildings insurance premium, the location of the property is the single most important factor and in some instances will determine whether the individual is able to obtain cover – Location encompasses factors such as crime rates and whether the property is exposed to potential flooding.