New research from The Co-operative Insurance today has revealed that nearly half (47 per cent) of first-time buyers do not have money set aside to insure their new home.
As a result, over a quarter (28 per cent) of new homeowners who have bought their homes in the past five years don’t have any home insurance in place, leaving more than £1.5 billion worth of property and contents currently at risk.
Caroline Hunter, head of home insurance at The Co-operative Insurance, comments:
“The research highlights not only a widespread confusion among first time buyers of all ages when it comes to assessing the type of home insurance they require for their property, but it also demonstrates that too many individuals have an inadequate level of cover or are leaving themselves exposed by purchasing insurance too late in the buying process, or worse, not at all.
“As many first-time buyers are likely to have previously rented a property, their landlord will have taken care of their buildings insurance and therefore, they may not be aware of their responsibility to have this in place when becoming a home-owner.
“While buying a house is a stressful time, we would urge people not to overlook their buildings and contents insurance and to make sure they provide the right detail when obtaining a quote, as not doing this can invalidate a policy.”
Top five details guessed when getting home insurance quotes:
1) Cost of rebuilding the property
2) Age of property
3) Type of door locks installed
4) Value of contents
5) Whether the property is in a neighbourhood watch area
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The Co-operative Insurance has put together the following guide for getting first time buying right when it comes to home insurance:
- Buildings insurance is extremely important as it should cover the rebuild cost of the main elements of your home including walls, floors, windows, roof and doors as well as other outdoor structures such garages, sheds, drives, fences and gates. It also covers permanent fittings, for example kitchens and bathrooms.
- Once you exchange contracts, you take legal responsibility for your new property, not on the day of completion. Make sure you have buildings insurance in place at this time.
- This type of insurance is optional but it is sensible to have this in place starting from the day you move your belongings into the new property (so arrange it before).
- If your home is part of a larger building, such as a block of flats, your buildings insurance may be bought in as a joint policy by everyone in the building so you might not need individual buildings insurance but you would still need cover for your personal contents.
- Your mortgage lender can arrange buildings insurance for you, but it might not be the best price or cover to meet all your needs. Though buildings cover can be a condition of your mortgage, it doesn’t mean you have to buy a policy from your lender.
- Building polices can often have a fixed sum insured that should cover the rebuilding costs for most homes. However if you choose a policy that requires you to set your own level of cover you should insure for the rebuild cost, not the market price of your property. This can often be found in your valuation or homebuyers report. More information can be found on the Association of British Insurers’ website: http://abi.bcis.co.uk
- Contents insurance will protect your belongings, i.e. things that you keep in your home, like furniture, carpets, curtains TVs, and other valuable items such as jewellery and mobile phones. Additional cover may need to be added if you wish to cover these items outside your home.
- Another reason for making sure you have contents in place at the time of the move is because some home insurance policies will cover your personal belongings ‘in transit’ during the house move if using professional removals contractors, but not all do – check your policy details.
- For both buildings and contents, choose an excess level to suit your needs based on what you can afford to pay. This usually consists of a set or ‘compulsory’ amount and a flexible or ‘voluntary’ amount that you can choose. These amounts combined are the total amount you must pay towards any claim.
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