Arranging Home Insurance
Once you have your new home and all your belongings moved in, the last thing you want to do is have it all ruined or taken away from you. But accidents happen and so do burglaries, as well as acts of God such as fire or flood, and you want to safeguard your property and possessions as best you can. You will need insurance cover in case of any of these awful situations, and for property ownership you'll need Buildings and Contents insurance, also called Household insurance.
What Does the Insurance Cover?Buildings insurance covers damage to the property structurally plus fixtures and fittings, and the contents insurance pretty much covers everything inside - basically all the belongings you would take with you when you move. Buildings insurance will also normally cover the outside such as gardens, garages, outhouses, gates etc, but check as there could be exclusions.
Contents insurance covers everything inside your house not bolted or fixed. It should cover furniture, clothes, hifi equipment etc. and may include holiday cover for your possessions when you are away, but ask about that too as it may need a separate arrangement.
There are policies that offer both as a package, but do check what is covered in the policy when investigating. Sometimes cheaper insurance might seem like a good idea but do take a close look at the cover you're getting.
Who Offers Household Insurance?There are literally hundreds of companies offering policies for insurance of all types, including your own mortgage lender. The internet today has revolutionised the way people search for information and insurance is no different. Try online comparison sites with cost calculators, check plenty of different policies and investigate different types of cover. Your IFA may also be able to guide you on this too.
Beware the Mortgage Lender's Tie InBuildings and contents insurance are a necessary part of property ownership and nine times out of ten your mortgage lender will insist on it. But look out. Mortgage lenders also often have their own insurers and might even charge you for using a different company so this is yet another thing to check when researching mortgages.
If you think the mortgage rate seem particularly low or attractive, ask about insurance! Chances are you'll find compulsory insurance as part of the policy, or a fee for insuring elsewhere. Also known as a 'tie in' this is yet another way for mortgage lenders to make a bit more money out of you.
How to Calculate the ValueIt's important to value your property and possessions accurately, and quite hard too. Identifying value for rebuilding is a good example - this will not be as high as the value of your home because you already own the land it stands on. Or stood on. The Association of British Insurers will be able to advise you on the cost of rebuilding your home and it's worth asking them to make sure you get an accurate valuation.
Valuing your possessions is also hard, because you're attached to them. But it's also not unusual for contents to be underinsured - it's wise to be realistic about the costs. Replacing even basic furniture can be costly, so be sure about it.
Go through room by room and list your possessions. And if you have anything you feel might be antique or valuable, it's well worth getting in a professional to help you value - and not someone attached to the insurer, someone independent.