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Insurance

Welcome to the property stop - find your ideal home and the right mortgage deal for you!

Buildings Insurance
Most lenders of mortgages insist that you have Bulidings Insurance as part of your agreement. Buildings insurance policies are usually index-linked, meaning they rise automatically every year to match the Retail Price Index (RPI).

Buildings Insurance normally protects the structure of your home from:

Severe Weather - Storms, Lightening, Floods.
Theft and Vandalism.
Fire, Smoke, Explosions.
Subsidence.
Burst Pipes.
Civil Commotion.
Water or Oil Leakage.
Impact from Vehicles, Falling Trees, Aircraft, Masts, Aerials.

Tips

Always to check to see if your mortgage company are offering a special deal on buildings insurance. It may even be included in your mortgage.
Always check that the amount of your policy covers the value of the house. If you feel it is too little, raise you cover.
Do not give any false information when apply for insurance. This will make your policy invalid when trying to make a claim.
Make sure your buildings insurance policy starts from the day you sign the contract, not the day you move in. You are legally bound to buy the house once you've signed the dotted line. If anything happens to the house between those dates, you may be greeted with a pile of charcoaled rubble and no insurance payout.
Check the "Excess" value (the minimum amount you have pay for any claim) and make sure it is to your satisfaction.
Frequently review your policy and update it if necessary - it is for your' own benefit.
If you make any alterations, structural or otherwise, it is in your best interests to inform the insurance company.
Read the small print... it may be boring, but it is there for a reason.

Contents Insurance

Contents Insurance policies cover movable objects inside the house. There are so many different types of policies and you must therefore shop around to see which one suits you best. It is estimated that around 25% of all houses in the UK are not covered, taking the ultimate risk of a fire or burglary.

Contents Insurance normally protects you from:

Severe Weather - Storms, Lightening, Floods.
Theft and Vandalism.
Fire, Smoke, Explosions.
Subsidence.
Burst Pipes.
Civil Commotion.
Earthquakes.
Water or Oil Leakage.
Impact from Vehicles of Falling Trees.
Your policy will cover your possessions for up to a certain amount, either stated by you, or categorised by the insurance company. There are two main types of cover:

Old-for-New - Items are replaced at their current market value.
Indemnity Cover - The Insurance company will taken into account general depreciation.
Check which type of cover the Insurance company is proposing (obviously the former is a far better option).
Some policies have special features. These can include built in Legal Expenses, cover for possessions in your vehicle, food spoilage in freezers, garage cover, outbuildings cover etc. If you want to keep your insurance premium to a minimum, ask the insurer about leaving off special features, or try raising the excess. The policy may ask you to submit a contents list, with individual items over a certain value specifically priced. This varies with different insurance companies.

Tips

Work out how much your possessions are worth before shopping around for an appropriate policy.
If you are getting an Old-for-New policy, make sure to value your contents at their replacement value, not at their actual value.
When moving house, check with the insurer to see if your contents are covered, and inform them of the exact date(s) that the move is taking place.
Examine any limitations and upper limit pay-outs before purchasing the insurance.
Check whether computer equipment, bicycles and special valuables have to be insured separately.
If you are studying away from home (e.g. at college/university), check to see if your parents house insurance covers your possession - you may find it does.
Check whether you are covered for accidental damage.
Do not give any false information when apply for insurance. This will make your policy invalid when trying to make a claim.
Don't underestimate the value of your contents - you will be the only one to lose out in the end.
Check your policy frequently and update it if necessary.
Check your Excess limitation, especially for money, valuables and single articles.
When getting quotes, state whether your house is alarmed, has lockable windows, double glazing or any other security features. Try to negotiate a discount on the strength of any of these.
Always read the small print and documentation. If you don't, you are leaving yourself open to the insurer's opt-out clauses.

Life Assurance

When purchasing a house, many people focus on protecting their possessions with contents insurance and the house itself with buildings insurance, but often overlook protecting themselves.

Life Assurance, in a nutshell, helps protect families against financial difficulties should one partner die.

It is particularly important when buying a house as most families are taking on a large financial commitment through their mortgage. As you can imagine, if the main income earner unexpectedly died, there is a danger that the family could have difficulty keeping up with the mortgage repayments, and risk losing the house.

Life assurance can also protect you beyond your mortgage. Other policies, for example, cover critical illness and critical events. These are explained more detail later.

One confusing area worth clearing up is the terminology used. The words "Life Insurance" and "Life Assurance" are often used interchangeably. We will stick with Life Assurance for the purpose of this guide.

Public Liability Insurance

Public Liability Insurance covers anyone who is in (or near) your home and suffers injury or death. The covers usually ranges between £250,000 and £1 million. Scenarios where this may occur include:

Protection from claims by trespassers, for example the injured burglar situation. Also remember that scaffolding can be a liability when you are having building repairs/renovations.
Falling objects from your house, e.g. a tumbling tile, falling rubble during renovations.
Public Liability insurance is often included in Building and/or Contents insurance policies but always check to see if you are covered.

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