How to Choose the Right Home Insurance

house and calculator

Moving into your first home is an exciting step, but it also involves lots of extra responsibilities. Those annual tasks left to relatives or flatmates suddenly fall on you, including setting up insurance policies.

It’s often paid grudgingly, but home insurance is essential for any homeowner or tenant. Yet where do you start if you’ve never had to think about it before? How should you choose a suitable policy and what counts as a legitimate claim? Below, we consider some of the key decisions when taking out your first insurance policy…

Safe as houses (or flats)

There’s a big difference between buildings and contents insurance. The former is a legal requirement covering the cost of rebuilding a dwelling in the event of fire, flood or natural disaster. The ‘sum insured’ value may be based on the number of bedrooms, or an estimated reconstruction value covering everything from roof tiles to plumbing. Online calculators provide a reasonable estimate of potential construction costs, but it’s better to be over-insured than under-insured.

Some apartment blocks bundle buildings insurance into development factoring fees, so investigate this if you’re moving into a new flat. Also check whether an insurance policy would pay for temporary accommodation if your home was uninhabitable. Certain policy providers include extras like this alongside emergency plumbing cover, which might be priceless if a pipe bursts...

Table of contents

Whether or not buildings insurance is included in factoring fees, you should still insure the property’s contents for yourself and any other occupants. Walk round every room, looking in cupboards to try and estimate the total value of every piece of clothing, furniture and electrical appliance. Sentimental items can’t be valued, but contents insurance should fund new replacements for everything you own. As with buildings cover, online calculators provide a rough idea of total value, but don’t rely solely on these estimates. If you need buildings cover as well, bundling both policies together often saves money.

We’d recommend adding out-of-home cover for valuables like smart phones and jewellery. This might variously cover loss, theft or accidental damage – high-value items like engagement rings may need to be listed individually. Don’t ignore the cost of replacing downloaded films and music either - large MP3 collections could cost thousands of pounds to repurchase if they’re not stored in the cloud.

Paying a premium

Insurance policies generally come with an excess. This is the amount policyholders must contribute towards any claim. Ensure this isn’t too high – a £500 premium when you’ve suffered a £600 loss makes any claim rather pointless. That’s especially true if you’re working towards a no-claims discount ( a saving on future years’ premiums) which is offered to customers who haven’t made a claim. Some firms offer protected no claims (so you can claim occasionally without this bonus being withdrawn), but terms and conditions vary widely. There may also be discounts for paying up front, rather than setting up a monthly direct debit.

Finally, read any small print carefully prior to signing up and again once the policy documents arrive. These documents are boring and wordy, but knowing the T&Cs will help you stick to your side of any agreement, like notifying the insurers about high-value purchases or changes in your circumstances. And if that all still seems a bit daunting, we’re always pleased to introduce you to one of our qualified and professional protection experts who can provide free, no obligation advice to ensure you receive the right level of cover.

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