Top 5 questions to ask
Purchasing insurance may not be fun but a home insurance policy is a financial safety net that protects you in case of a disaster. However we know that many people find buying insurance overwhelming – and it’s no surprise.
Whether it’s adverts on TV and radio, social media campaigns or well-meaning family and friends dishing out advice, it can be difficult to know what you need and even more crucially – where to get it from.
So, whether you decide to get advice from a professional or go it alone online. Here's our top five questions to ask when buying home insurance to ensure you get the right cover at a good price.
1.What's included as 'standard'?
A standard buildings and contents policy should cover your home’s structure and your belongings against fire, flood damage and theft as a minimum. However, every home and insurer is different, so it’s important to check what you are and aren't getting as part of a provider's standard cover including any exclusions in the policy, that might leave you without the cover you need.
2.How much insurance do I need?
The right amount of cover is key – too much and you could be overpaying on your premium, too little and your home may not be adequately protected. If you think that your policy could be doing either of these, then it’s worth speaking to a professional. They can help you identify your needs, provide you with advice and complete insurance quotes for products based on your personal requirements.
Here are a couple of tips to help you calculate the amount of insurance you need for both buildings and contents.
Buildings: You’ll most likely be asked for the rebuild cost of your home. This is different to its market value, the rebuild cost is the amount it would cost to completely rebuild your home if it was destroyed beyond repair. Therefore, this shouldn’t be undervalued as your insurer will use your rebuild cost to calculate your claim – should the worst happen.
Contents: The easiest way to calculate the appropriate level of contents cover is walk around each room in your home and add up the value of all the contents – including outdoor furniture and belongings in garages or sheds.
3.What are my policy limits?
The sum insured is the maximum your insurer will pay out if you claim – including buildings and contents. Also, most policies will have a single item limit – the most an insurer will pay for one item. If the value of an item such as art or jewellery exceeds this set value, then you need to register the item individually. Always check the policy book to ensure that your valuables don’t exceed the overall limit.
4.What’s my excess?
When claiming you will be required to contribute towards the cost of a claim, this is called excess. The insurer may ask for this up front before they continue with the claim, or they may reduce the amount they pay for a claim by the excess amount. Insurers may differ in their approach so it’s important to check with them when making a claim. The amount differs between insurers and different sections of your policy may also have different excess levels, but it’s important to know where you stand so you can be confident you can afford to pay it should you need to claim.
5.What does accidental damage cover?
Accidents happen – that’s just part of life. What matters is that you’re covered when they do. Adding accidental damage to buildings insurance would provide cover for unintentional damage to your property, such as putting a nail through a pipe when putting a picture on the wall or putting a foot through the ceiling when up in the loft. Accidental damage cover on contents insurance provides cover for a range of unintentional events, such as spilling paint or red wine on your couch.
Armed with these questions, you can improve the home insurance buying process for both yourself and your adviser. All parties can feel confident that the right policy is in place, and you can enjoy your home safe in the knowledge that you’re not going to be left at financial risk. Your adviser will also be aware of remortgage dates for your mortgage and renewals dates for your insurance, so be sure to ask them to get in touch, when they’re due. They’ll be able to tweak quotes and applications for you as you grow into your home.
But remember – If there’s anything else you’re unsure of – speak to someone who can give you professional financial advice and remember, there’s no such thing as a silly question!
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