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A house is the single most expensive possession for most people. This is the place where you live and this is where you keep most of your possessions. The cost of repairs or rebuilding a house in case of a natural disaster is beyond the means of most of us. Strictly speaking, the house insurance is not compulsory, but it is critical that anybody who owns a property, has proper house insurance to cover the costs in case of a disaster.
There are two main types of house insurance policies i.e. Building Insurance or Content Insurance
Building Insurance
- All the permanent structures in your house as well as the land you own is covered by building insurance
- The policy is often extended to cover outbuildings such as garages, garden sheds, fences, boundary walls, swimming polls, paths, drives, gates etc
- Other permanent fixtures such as fitted kitchens, baths, toilets, sinks are also covered as part of most policies
- In addition to the above some policies even cover frost damage to pipes connecting your house to the main supply
- Some polices may even provide alternative accommodation when your house is inhabitable
- The location of your house will show if you are at risk of possible subsidence. The insurer will check that and will only cover subsidence if it was previously reported
- If you are situated in an area where there is high risk of flooding than it must be declared before you take out the policy otherwise your insurance claims may become invalid
- When you take out a mortgage for your house the lender will insist that you get a building insurance cover. The lender wants to make sure that in case of a catastrophe you will be able to pay for it. This is why most people take out building insurance when they take out a mortgage
- The building insurance generally covers the following set of risks
- Earthquake
- Fire
- Floods
- Subsidence
- Storms
- Falling objects from aircraft
- Malicious Behaviours
- Falling trees and branches
- Impact by vehicle
- The building insurance does not cover the following set of risks
- War
- Terrorism
- Pollution
- Radioactive Containments
- Pressure Waves from Aircraft
Contents Insurance
- The cost of replacing all your house contents which you have bought over the years can be staggering, it is therefore essential to have contents insurance in place
- The contents insurance will cover just about everything that you can take with you if you moved your house
- The insurance company will generally payout in case of the following
- Theft
- Fire Damage
- Damage by Flooding
- Vandalism against your house
- Earthquake
- Typically your contents insurance will cover items such as TV, DVD player, CD collection, expensive jewellery, furniture, clothes, kitchenware, beddings, carpets, curtains, clothes etc
- Some content insurance policies will also cover items outside your home as an additional extra. These may include contents of your wallet or handbag, items found in your shed such as hedge trimmers / lawnmowers, a pedal cycle kept outdoors or credit cards and baggage when travelling
- If you manage to lose your house keys, a few policies will even pay for the replacement of locks in the house but you need to check the small print for this
- The contents insurance policy will not cover if
- Wilful damage is done to the property
- An item is lost outside at a certain distance away from the house
- Damage is caused by DIY or you damage the glass in your property
Tips for House Insurance
- Always do a comprehensive survey before you buy the house. This will give you a complete picture of the state of the building. Insurers will only cover things like subsidence if you done such a survey
- The excess value may vary depending on the type of claim you make. Always check the excess value before you make the claim
- Some house insurance policies may come with “no claims” discount. This no claim bonus can even be extended to your content insurance cover. If you have not claimed in the past then you can get a cheaper policy
- The insurance company will always ask for the cost if rebuilding your house, this value can normally be found on the mortgage agreement or the deeds of your house
- To get an accurate estimate for contents insurance, you should make a list of all the contents on a per room basis. The things which are generally overlooked are carpets, curtains, ornaments or expensive jewellery
- To keep your insurance premiums down look at the following possibilities
- Ask for an introductory discount
- Choose the same insurer for both buildings and Contents insurance
- Mention the number of years without making a claim
- Take crime prevention measures such as becoming part of the neighbourhood watch, having adequate locks and security in the house and having a burglar alarm will help
- If you are a landlord then make sure that your building insurance policy covers tenants liability insurance.
- The tenants liability insurance covers the homeowner for any damage to the property caused by the tenants living in it
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