Marketing director at Swinton Insurance, Anne Kirk, shares her top tips on protecting your new home, clarifying any confusion about the insurance you need when stepping onto the property ladder for the first time.
1. Lay the right foundations
Buildings insurance can cover the cost of rebuilding or repairing your home if it’s damaged. It covers the bricks and mortar along with any fixtures and fittings (such as a fitted kitchen or bathroom suite) in the property. Most mortgage lenders will insist you have buildings insurance in place before exchanging contracts so it’s a crucial part of the home-buying process.
When taking out buildings insurance many new homebuyers assume they need to insure their property for the amount they paid for it. But, the good news is that it could be a lot less. That’s because buildings insurance is there to cover the cost of rebuilding your home from scratch, which would usually cost less than the market value of the property.
To find out the rebuild cost of your new home, check your RICS HomeBuyer Report if you have one, or alternatively you can use a free online rebuild calculator.
2. Protect your possessions
The contents in your home aren’t covered by your buildings insurance policy, so you’ll either need to get a combined buildings and contents home insurance policy or a separate contents only insurance policy to protect your possessions against things such as theft, fire and flood.
A good way of thinking about what is covered by a contents insurance policy is to imagine turning your house upside down – anything that would fall out is normally classed as contents. It covers the kind of things that you would take with you if you were to move house such as furniture, clothes and electricals.
You should also consider protecting your possessions for loss outside of the home. Both accidental cover and out of home cover are usually optional add-ons to your home insurance policy.
3. Get the numbers right
It’s important to calculate the value of your contents accurately to ensure you’re properly covered. Consider everything from curtains, cushions, clothes and kitchen gadgets – you’ll be surprised at how much it all adds up.
Methodically work your way around your home, making a list of each and every belonging and add up what it would cost to replace every item at today’s prices.
There’s usually a single item value limit in place on contents policies of around £1,500. So if you have one item worth more than this, speak to your insurer about your options.
4. Make it affordable
An ‘excess’ on your buildings and / or contents insurance means that you’ll pay a minimum amount every time you make a claim on the insurance policy. For example, if you choose a £50 excess and make a claim for £400, you’ll receive a maximum of £350 from your insurer.
It’s worth knowing that many policies automatically include a compulsory excess which applies in addition to any voluntary excess that you choose. It can be tempting to choose a high voluntary excess as this usually lowers your premium. But think carefully, if you find yourself needing to claim – would you be able to afford the excess?
Also consider whether you’d be best opting for a monthly direct debit, or paying annually. Monthly payments might be more convenient, but you could avoid any interest charges if you choose to pay annually.
5. Plan your holidays
When setting up your home insurance policy you’re likely to be asked if you plan to spend more than 28 consecutive days out of the country. So, it’s worth considering any plans for extended holidays as this could increase your premiums. If you do decide to pack up and leave for a month, remember to tell your insurer as otherwise any claim while you’re abroad could be invalid.
6. Be safe and secure
You can take some practical steps to lower your premiums by setting up some basic security measures, such as fitting a professionally maintained burglar alarm and having approved locks on all windows and doors.
Remember that if you have these in place and state them in your insurance policy you must use them, otherwise your claim could be invalid.
7. Prove your worth
If you do have to make a claim, you’ll usually be asked for proof that you own the items you’re claiming for. Keep all receipts and ensure you have access to debit / credit card statements so you have proof of purchase.
8. Use a reputable removal company
It’ll help things go smoothly on the big day and can help to put your mind at ease. A decent removal company should have insurance to cover any mishaps that may happen in your move, as your home insurance policy won’t.
Research your removal company thoroughly, ask for recommendations from family and friends, and make sure they are members of the British Association of Removers (BAR).
9. Shop around
Always shop around for the best deal, and don’t automatically go with your mortgage lender’s suggestion. After all, every pound you save can be put towards paying utility bills, or more excitingly, new furniture!
Home insurance policy details differ with each insurer, so be sure to consult your own policy documentation for full details of the cover, excesses, terms and conditions that apply.
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