When it comes to considering insurance for your UK home, this generally amounts to two things. The first is known as contents insurance, where what is in your home is covered in the event of an emergency. This also includes the flooring, as well as the home’s carpets if you happen to have them.
The second type of insurance, and the one that we’ll be delving into, is buildings insurance, which covers the basic structure of your home. Anyone with a mortgage is required to have buildings insurance and is unlikely to be given a choice in the matter (unless the property is purchased with cash). The Hiscox before-you-buy checklist for buildings insurance can help you get started. It’s important to find out what a good policy really looks like otherwise the consequences could prove very costly.
What do I look for in a buildings insurance policy?
The average policy comes with a slew of features, all of which are designed to try to convince you of their importance. For the inexperienced, this is where traps can appear. As a rule of thumb, keep your eye out for these specific features:
- Index-linked sum insured – With inflation, the cost of rebuilding a house gets higher every year. By having this feature, you won’t be left completely underinsured in the event that your home is damaged further down the line. The amount provided must cover the cost of rebuilding your home.
- Sum insured – In the event that your home is completely destroyed, this covers the funds needed to clear the site and rebuild. A fixed limit of £250,000 or higher (or your own limit) is sufficient.
- Public liability – In the event that you are sued due to someone dying or being injured (or their property is damaged) because of your home, this type of insurance would cover the cost. A fixed rate of £2,000,000 will do.
- Alternative accommodation – This covers the cost of having to stay elsewhere in the event that your home is under repair from something like a fire or flood.
Considering contents insurance
On the other hand, some might consider buildings insurance but not contents insurance. While completely possible, it can lead to a tricky situation, as experienced by eighty-two-year-old Sabata Picone. A leaky pipe had burst and damaged her neighbour’s home, a loophole which caused the insurer not to cover the damage because there was no contents insurance. To avoid situations like these, considering both types of insurance would cover all possibilities.
To conclude, it’s definitely possible to end up with an insurance policy that is completely subpar. Simply remember that if you own the property yourself it’s your responsibility to make sure that it’s covered in the event of a natural disaster, such a fire or flood – and it pays to be thorough. Don’t fall into the beginner’s trap of choosing the policy that simply looks cheapest.