Home insurance
Our homes and their contents are not only a big investment, but an important part of our lives, so it makes sense to take steps to protect them against damage or theft. Most of us hope that our home will not fall victim to a disastrous event, but it's a fact that in the UK 1 in 3 of us will get burgled at some point in our lives and 2 million homes are at risk of flooding.
There are two types of insurance: Buildings Insurance to protect the building itself and Contents Insurance to protect your possessions.
Buildings insurance
This is a compulsory insurance that you will need to have in place before exchanging contracts, and it's a good job too!. Imagine if your house burnt down and you lost everything! The figure insured has to cover the entire cost of rebuilding your home should it be damaged by a big disaster such as a fire or flooding. Your insurer will value your insurance at about 75% of the total property value which reflects all the costs associated with re-building your home itself, not the value of the land.
What buildings insurance covers
Buildings insurance covers the costs that would arise if your home had to be re-built as a result of damage from events beyond your control including weather damage, subsidence, fire or vandalism.
If you are buying a flat, it's more than likely it will be leasehold. Check that the freeholder or agent has taken out buildings insurance and get hold of a copy of the certificate for the conveyancing. You'll also be able to check that there is adequate cover, what your share is going to cost, and if you need to top it up.
Check the small print of your policy to see exactly what it covers, as they don't always insure the same things. Generally, building insurance covers the structure itself as well as the permanent fixtures such as the roof, floors, windows, wiring, plumbing, kitchen and bathroom. Linked or nearby structures such as conservatories, garages, fences and sheds are also normally covered.
You may also be able to insure against:
- Damage to plumbing installation by frozen or burst pipes
- Accidental breakage of windows or fixed sanitary ware
- Arranging alternative accommodation if your home is uninhabitable for the duration of the repairs
- The cost of damage resulting from a forced entry by the emergency services
- DIY mishaps
Factors that affect your building insurance premiums
Flood risk
Don't underestimate the damage that water can cause. What could appear like an innocent stream at the end of your garden could seem more like Niagara Falls once those April showers set in! However, even if you live in a flood risk area there are a number of measures you can take to minimise the water's damaging effects and to reduce your premiums. Install flood barriers for example, and store valuable items in raised dry areas.
Subsidence
Potentially an expensive and worrying cause of structural damage, subsidence can arise in properties built on clay soils or where water leaks into sandy or gravelly soils. You're likely to have to pay higher premiums or excesses if you live in an area prone to subsidence. However, even if your property has been affected by those unsightly cracks, you should still be able to insure it as long as repair work has been carried out successfully. And you can take a number of steps to minimise the risks such as planting trees away from the house and keeping them under a maximum height.