Home insurance – A Buyers Guide

Home insurance – a buyers guide

If theres one thing in life few of us could do without, its our home. Not only does it provide us with the basics that we take for granted but it is often packed with our most important possessions and contains a host of memories which we would never want to lose or have tarnished.

That is why home insurance is so important. It can protect our most prized possession against a range of risks including flood, storm and wind damage, as well as theft and vandalism.

However, with more than 50 home insurance providers in the UK it can be difficult to know how to choose a policy, which options we should select and how much we should pay. Here we take a look at the different home insurance choices to help you make a decision about the right policy for you.

What are the different types of home insurance?

Broadly, there are two types of home insurance in the UK – buildings insurance and contents insurance. These policies can be combined or taken out separately with different providers. So what is covered by each type?

Buildings insurance: This covers the bricks and mortar of a home as well as its permanent fixtures and fittings. It should be set at such a level that if your home were completely burned to the ground it would cover the rebuild cost in its entirety. Many mortgage providers now insist that you take out buildings insurance so that they wont be left without the security they placed against your loan should a disaster occur.

Contents insurance: This protects items that are not fixed in your home – for example, curtains, carpets, clothes, electronic goods and furniture. Contents insurance is not essential but is advisable, particularly as it will protect you against home burglaries as well as risks including fires and storm damage.

In addition there are a number of specialist home insurance policies on the market – these can cover properties such as holiday homes, homes in flood risk areas, green homes, period properties, and thatched houses.

What should you watch out for when choosing a home insurance policy?

As with any form of insurance you should read the terms and conditions on a home insurance policy thoroughly before applying. Look out for any notable exclusions – such as any risks you are not covered against or any items you cannot insure.

Check the policy limits on both buildings and contents insurance. With buildings insurance make sure you are covering the rebuild value of the home and not the retail value – there is no reason to cover the retail value as this takes into account land, location and more. With contents cover, watch out for limits on specified items – items that are worth more than this limit (typically set at around 1,500) may need to be insured separately.

How to choose a home insurance policy

Think about what you want your policy to cover and the options you require. For example, many home insurers will offer cover for accidental damage to contents. This can be worthwhile if you have high value items in the house and particularly clumsy children but may not be worth paying an additional premium for in other cases because your policy excess may be too high to make it worthwhile.

Considering the policy excess is important too. Though setting the excess at a high level will lower your premiums, setting it too high can take away the purpose of your policy. Make sure you only set it at a level you can comfortably afford. Look into payment methods too – can you pay monthly and if so, are you charged extra?

Once you have decided on the policy options that are important to you, use a comparison website to compare home insurance policies. By inputting details into one of these search tools you can find quotes from a range of insurers. By examining the options available and the premiums for each one you can make your decision about the right policy for you.

How to save money on home insurance

There are savings to be made if you increase the security at your home cutting down the risk of theft. Many insurers will ask if you have alarms, window locks and door locks in place and may recommend specific devices. You can also cut premiums by reducing the risk of a fire getting out of hand such as by quitting smoking, installing smoke alarms and fire extinguishers.

However, comparing policies online is the key to cheap home insurance as most providers offer their cheapest deals on the internet due to reduced overheads.