Many people do not insure their home or contents and do not realise the consequences of this until it is too late. Another problem is that people tend to underinsure which also can prove costly. A guide to home insurance is discussed below.
1. Compare different providers
It is amazing the difference in cost between quotes of different providers. Therefore you should always shop around before paying your premiums.
2. Assess your needs
A costly mistake with building insurance is that people often confuse market value with replacement value as you may be paying more than you need to. It is a good practice to have a professional valuer value your home to give you a good indication of how much it would cost to replace your home.
The best way to assess your needs with contents insurance is to go through each room and itemise everything you own.
3. Types of policies available
With building insurance there are two main types of insurance available:
Defined Events Insurance
This insurance will cover your building only under certain circumstances. The policy document will provide you with a list of the specific events that are covered.
With contents insurance most policies offer a new-for-old replacement policy so if your contents are damaged or stolen you will receive a new item of the same type.
The alternative to new-for-old is an indemnity policy. With this type of policy you receive a depreciated value of what you lose. This is a cheaper form of insurance but you are liable for any shortfall in cost.
Some things to check on your insurance policy:
- What fixtures are covered in the fixtures and fittings of the building cover?;
- Are guests' belongings covered?;
- Are you covered for loss of your credit card?;
- Are you covered for replacement locks if you should lose your keys?; and
- If it is a new for old policy how old do your contents have to be before this policy stops?
5. Ways to reduce your premiums
The more security you have on your home usually the cheaper the insurance will be. Smoke alarms, window locks, deadlocks and burglar alarms all help reduce your premiums. For example, you may be able to receive up to a 15% discount on your premiums by having a back-to-base alarm.
Your claims experience also has a bearing on your premiums. The more you claim, the higher your excess may be.
Contact Us for more information and to discuss the most suitable solution for your unique situation.
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