A home is probably the most expensive thing you’ll ever buy. Should it ever incur any damage however, your financial outgoings really could go through the roof. Insuring your home is an absolute must, as this can save you huge amounts of time and money, should something ever go wrong. Home insurance is a term which actually encompasses buildings insurance and contents insurance, two very different things.

A home grants us shelter for our family and our worldly possessions. Unfortunately, in spite of fire and flood preventative measures, people can still lose their homes due to unforeseen events. If your home is damaged or destroyed, it’s not only the cost of expensive items such as televisions and fridges that need to be recovered: clothing and cooking utensils will also have to be reacquired, not to mention the rebuilding of your home in a worst-case scenario. Having the right building insurance means that at least you won’t need to worry about the cost of materials and labour.

Even if you’re living in rented accommodation, or rooming with someone else while at university, you still need to think about contents insurance. This can cover anything from your laptop to a generations-old family heirloom, so if you were unfortunate enough to have it stolen or damaged, you wouldn’t find yourself out of pocket. All things considered, finding the right home insurance policy is essential.

Both tenants and homeowners should always have contents insurance. If you’re a homeowner, you may well find that your insurer for the building will provide a combined deal, so you can purchase protection for your contents too. If you’re a tenant, you need to check with your landlord to see what they have insured as the owner of the building. Your possessions won’t generally be covered, and sometimes they’ll even forget to insure the items which ‘fully-furnish’ the flat.

Contents insurance is optional: some people simply don’t believe that a thief could get past the myriad of padlocks and alarms they’ve got installed. It’s not only your television and stereo you need to worry about though, as you’d be hard-pushed to replace years of accumulated towels, bedding, crockery and clothes, if they were to be lost in a fire or flood. Similarly, if you were a victim of theft, you’d be surprised at some of the things such scoundrels will steal: shoes and kitchen utensils are just as popular as iPods and laptops.

Contents insurance will generally cover any item that is not a part of your building, including furniture, clothing, carpets and curtains: some insurers will even reimburse you for the food in your cupboards. You can also purchase additional cover, such as protection for your bicycle or even for your handbag on a night out. It’s always worth reading the small print though, as many policies won’t consider your lawnmower part of your home, and they won’t pay out for undeclared items that are worth over a certain amount. So whilst most policies will insure your contents against fire, flood, theft and vandalism, they won’t usually pay up for antiques, artwork or items you’ve had stolen outside. Nor will they insure you for DIY accidents, so if you’ve been a bit too trigger-happy with the nail gun, they’ll expect you to cover the damages.

It’s often worth looking into ‘new for old’ policies, too. If someone steals your old television, you might only receive £20; with a ‘new for old’ policy however, the insurer will pay for a new one. Regardless of the policy you decide to take out, make a comprehensive list of all your contents and their worth. If the policy doesn’t pay out enough to cover the cost of your possessions, you may need to pay more to obtain one that does.

Building insurance covers the cost of your home’s permanent structures, and the land that it is built upon. It can include fixtures and fittings indoors, and protect your outdoors property in the form of a garden shed or fence. The policy will pay up for the cost of rebuilding, so in the event that a fire, storm, flood or earthquake damages the structure of the building, you don’t need to worry about the cost. Most policies will also include protection against subsidence and falling trees, as well as any impact made by vehicles or airborne objects. Vandalism and riots can be part of the policy too, as the insurer will provide the price of any materials and labour required to repair your property.

Insurers will not pay for damages done to the home through DIY attempts, and will similarly refuse to pay for any destruction caused by war, terrorism, radiation or pollution. Similarly, if you don’t state that your home is prone to flooding – and a flood subsequently destroys your foundations – your policy becomes null and void. When it comes to home insurance, honesty is definitely the best policy. Of course, a survey of your home should identify any potential problems and the price it would cost to rebuild it.

You always have the option of adding extras on to your cover, it should be noted. You might choose to take out accidental damage cover, or a provision for alternative accommodation if your home needs to undergo renovation. You can take out public liability insurance, so you won’t need to pay out if someone manages to injure themselves on your turf. There are a huge number of options available to you, so make sure you choose the policy that’s right for you.

Shopping around is by far the easiest way to save on home insurance, but there are a number of other ways by which you can save yourself some cash.

You can raise your voluntary excess, but make sure you can afford to do so. The higher the amount you are willing to pay towards damages or recovering goods, the lower your monthly payments will be. However, as a legally binding contract, your home insurance policies will remain steadfast to their conditions: if your house does happen to be destroyed in a natural disaster, the insurer will expect you to cough up before they do.

Also, if you do have something stolen or damaged, consider whether it’s worth making a claim. It may be cheaper, in the long run, to pay for low-cost household items yourself, as any claim will affect your no-claims bonus. Your provider will grant you a discount for every year that you avoid making a claim, so it’s worth thinking twice before asking them to pay up for a few DVDs.

Lastly, try to make your home as safe as possible: you can reinforce flood defences or even modernize old heating, all of which could demonstrate to the insurer that you are less likely to claim in the future. It’ll save on your energy bills, too. It might seem like a lot of money to invest, but do your sums and you could discover that you’ll end up saving money in the long run. You can also make your home more secure by adding an extra lock or burglar alarm. If you don’t have a smoke detector, buy one: you can save money this way, and it’s a legal requirement if you’re a landlord. It’s also worth noting that the insurers like to know you’re at home and on the lookout: if you work from home or live in a neighbourhood watch area, it’s less likely that you’ll be broken into.

Cost Factors

The main factors that affect the cost of your home insurance are the type of home you live in and its location. Insurers will look to check the condition of your chosen dwelling, and if it is more susceptible to potential damages, they’ll up your monthly payments. Generally, new homes can receive a discount of up to fifteen per cent. The construction of the home is important too, with building techniques having advanced somewhat over the last few hundred years. Needless to say, a thatched roof is going to pose more of a fire hazard, as are those beautiful antique beams.

The security of your home will also affect the price you pay, so sprinkler systems and window locks will help to lower your premium. Living close to a fire department may also grant you a discount, as will living in a neighbourhood watch area. Smokers will, on average, pay more, though it’s never worth lying about whether you’re prone to the odd cigarette. If a fire was caused by an unextinguished cigarette, the insurer could refuse to pay out for the extensive damages.

Of course, security also varies according to the area in which you live. Floods and earthquakes may not be covered by normal policies, so if you live in a neighbourhood that has suffered from natural disasters before, you may have to pay extra. Theft and vandalism are obviously threats too, so the insurer will charge less if you live in an area where the crime rate is low. Finally, the cost of home insurance will reflect the amount of cover you require, so expensive tastes will inevitably equate to a more expensive policy.

Neither buildings nor contents insurance are legal requirements. If you arrange a mortgage, then your provider will ask for proof that you have a policy, as this ensures that you’re protecting their investment. So think of buildings insurance as a requirement of securing a mortgage, rather than something every homeowner must purchase. If you buy your property outright, you are not legally obliged to protect it, though it makes sense to do so for financial reasons. Of course, a legal requirement of any insurance policy is that you abide by their rules and regulations: if you lie about any aspect of your home, or withhold information, the contract will be rendered invalid.

Another legal obligation is for landlords to ensure that their properties as fit for human habitation. The 1985 Landlord and Tenant Act means that if you wish to rent out your property, it must be properly protected.

Neither buildings nor contents insurance are legal requirements. If you arrange a mortgage, then your provider will ask for proof that you have a policy, as this ensures that you’re protecting their investment. So think of buildings insurance as a requirement of securing a mortgage, rather than something every homeowner must purchase. If you buy your property outright, you are not legally obliged to protect it, though it makes sense to do so for financial reasons. Of course, a legal requirement of any insurance policy is that you abide by their rules and regulations: if you lie about any aspect of your home, or withhold information, the contract will be rendered invalid.

Another legal obligation is for landlords to ensure that their properties as fit for human habitation. The 1985 Landlord and Tenant Act means that if you wish to rent out your property, it must be properly protected.

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