For most of us, the need to insure the buildings of our home comes from the legal documentation signed when gaining a mortgage. Until you fully own a property, you have to demonstrate that your bank/mortgage provider’s investment is safe. After all, if you didn’t have a valid policy and the house was to be destroyed, there’s a good chance that you would be left destitute and unable to pay the remainder of your debt.
Not only would that be a pretty miserable situation it could be made worse by the possibility that you could end up bankrupt. That’s if you can’t continue repaying the mortgage or recover the costs through another means – such as selling the land. This, in short, is why buildings insurance is recommended.
It’s not just what’s outside that counts but what’s inside, too – so insure your possessions
Buildings insurance will only cover you for the bricks and mortar. Whilst this means that the value of your property is protected, your possessions inside won’t be. So it would also be recommended that you bought into a good contents insurance policy.
By having both buildings and contents insurance, you will be covered for almost any eventuality. For instance, if your home was to be burgled, with thousands of pounds worth of jewellery or electrical equipment stolen, most contents policies would cover this. Equally, should your area be affected by flooding, causing structural damage to your home and ruining appliances, carpets and furniture, only if you had both forms of cover would you be able to claim for the cost of repairs and replacements.
Cover can be variable but don’t cut corners
There are varying levels of contents insurance available, enabling you to choose the amount of protection and, to a certain extent, how much you spend on cover. Whilst some insurers offer bespoke packages based on the cumulative value of the products you wish to cover, many offer tiered groups – for instance up to £10,000, £10,000-£20,000 and so on.
This allows you to evaluate the worth of your possessions and what you really need to cover. Essentially, contents insurance should always cover the most expensive items in the home; everything that you couldn’t comfortably replace if it was lost, stolen or damaged. So if you have a high-end television, luxury leather sofas or fine jewellery, this should all be included within your cover.
For specialist items with exceptional value, including art or antiques, you may need to seek a tailored insurance policy away from your standard contents cover. However, for any other items around the home, you should be able to group them together to form a comprehensive home insurance package.
Be sensible now, not sorry later
Unless you’re living in a some kinds of rented property, there’s no legal or contractual imperative to have contents insurance. But this shouldn’t mean that you can view it as being optional. Our experience is littered with people who have taken a risk and chosen not to insure possessions, only to pay the price later. None of us want to consider worst-case scenarios but we shouldn’t ignore the possibility that something could go wrong. When you buy comprehensive home insurance, including both buildings and contents cover, you can at least relax knowing that everything you hold dear is protected. That’s a nice place to be.
And this peace of mind can be secured through a simple annual payment or, if you prefer, smaller monthly instalments – it’s up to you. Also, you can organise your insurance over the phone or on the Internet, to suit your needs. You might also choose to compare various quotes to ensure that you enjoy the best rate available. It really is that simple! So there are certainly no excuses for failing to secure effective cover for your home.
*Note: Insure4Retirement has issued this guide for information purposes only regarding what could be available on a home insurance product. No advice is being offered as to the suitability of any policy to a person’s own personal circumstances.