INTRODUCTION:
If you own a vehicle or house then insurance is something you will have to think about. While it is not the law to have road vehicles insured, insuring you home is also something you will certainly want to do to protect yourself against potential losses, and if you have a mortgage it may in fact be required by your lender. There are many different types of insurance available to suit different needs and budgets, so use this guide to learn a bit about what you can expect from insurance.
When it comes to buying insurance look for competitive rates of cover, but bear in mind that insurance is vital for your peace of mind and safety, and is not something worth cutting corners on.
Whichever insurance you do decide to purchase you should take care to familiarise yourself with the terms of your policy so that you know what it will cover you for and the limits of the compensation it will provide. You should also remember that every time you make an insurance claim you will have to pay what is called an “excess”, which is the first part of any claim, with the amount agreed with your insurer. Alternatively, you can pay a waiver fee on top of your insurance premium and this means that you don’t have to pay the excess if you make a claim.
Home Insurance
Home insurance is vital as the potential losses caused by theft or accidental damage are very high. Your home is probably your most valuable asset and it is worth getting the right insurance to ensure that it stays that way. There are two types of insurance to consider for your home: Home Contents insurance and Buildings insurance.
Home Contents Insurance
This covers you against the loss or damage to the items in your home that you would normally take with you when moving house. You will be covered in the event of theft and break in, and also damage caused by events such as fire, storms, floods, explosions, falling trees and earthquakes.
What contents are insured?
Your home contents insurance will cover you for items such as personal possessions, furniture, theft of garden furniture, stolen money and bank cards, death of you or your spouse, medical expenses due to an injury caused by a defect in the building and rent to live elsewhere if you cannot live at home because of damages covered in your policy. However it will not cover everything, for example items stolen from outbuildings or individual items insured under another specific insurance policy. Most insurers insist you specify particularly valuable items separately, such as jewellery or antiques, or items that can be easily removed, such as lap-top computers and bicycles, so that this can be valued separately to calculate your total premium.
What happens if you are under-insured?
Your home contents are under-insured if the cost of replacing all the items of your home with similar ones at the time of claim is more than the value you had insured them for. When making a claim your insurer will calculate whether or not you are under insured, and if you are then you will only receive a proportion of the total claim you make. In light of this it is important to insure your contents for their full value rather than trying to save money by under-insuring.
Buildings Insurance
This covers you against damage to all the things you would leave behind when moving house, such as the house itself, walls and fences, swimming pool, tennis courts garages and outbuildings. You will be covered for damage caused by events such as fire, lightning, explosions, floods, impact to your house by an aircraft or other vehicles, malicious and intentional damage, as well as theft and break-ins. However, Buildings Insurance will not cover everything, such as fire damage to a thatched roof or damage to non approved buildings (buildings the relevant local authority did not approve the construction of.)
What happens if you are under-insured?
You must insure your home for its replacement value, which is the amount it would cost to rebuild the house and outbuildings, tennis court, walls etc. with new material at the time of the claim. If you are under-insured then you will only receive a proportion of the claim you make, so it is important to insure your buildings for their true value and have regular valuations to stay up to date.
With any insurance, to ensure you have the right level of cover you must be open and honest with your insurer so they can assess the risk and provide you with the right policy.
10 questions you should ask your insurer
Home contents cover is quite straightforward but there are a few things you should ask your insurer in order to avoid claim headaches down the line - below is a guideline of questions that are important to ask your insurer before you sign on the dotted line.
1. What will the excess be that I have to pay in the event of a claim?
2. Could you please explain to me what average means?
3. Will my contents be covered in storage if I need to store it for a while?
4. If I move house, while my contents is being transport from the one home to another will it be covered?
5. Please explain what public liability means?
6. When should I specify any valuable items under my insurance cover?
7. If I move house, how long do I have to inform you of my new address?
8. Do I need to take an inventory or a video inventory of all the contents in my home?
9. Do I need to keep receipts for everything in my home?
10. Does my cover include theft, weather-related claims, when visitors damage by goods and other household accidents?
The above is information brokers should provide to the client but, in some cases, this information is not relayed to the client and the client does not know that he should ask these questions!
Making sure that you know everything about your insurance will save you a lot of stress when something goes wrong. Imagine having to run around trying to get receipts after you have just been broken into?
Make sure you know what you will need in order to process a claim without any headaches and be sure to know what exactly is covered and what is not so that you don't end up with nasty surprises down the line.