11 April 2016

A guide to buying home insurance

There’s a lot to think about when you’re buying your first home or moving into your own rental property – it’s one of life’s memorable milestones.

You’ve decided where to hang your new TV and tracked down a decent coffee shop, but have you thought about getting your insurance so you’re covered if your TV is stolen while you’re out enjoying a latte?

As you go through life, your insurance needs to change with it. No matter whether you’re moving into your first bachelor’s pad, starting a family or watching your child flee the nest for university.

That means it’s a great idea to regularly look at your home and check what help you might need to get back on track if something happens.

It’s your bricks and mortar

If you’re buying your own property, your mortgage provider will ask you to organise buildings insurance as part of the obligatory paperwork (and we know there’s a lot of it).

This will cover the cost of rebuilding or repairing your home, from the walls and roof to anything that is a permanent fixture, like kitchen cupboards, bathroom taps and even the garden shed.

It’s worth checking that your buildings insurance policy limit is high enough to cover the cost of rebuilding your home – to its existing size and standard of construction.

Secure your stuff

Contents cover is not obligatory, but most people want to know that if something happened, they would be able to replace their furniture, valuables and electronics and get back to normal life as quickly as possible. It’s pretty uncomfortable sitting on the floor.

If you are renting a home, your landlord should have buildings insurance in place and possibly some contents cover if it is a ‘furnished’ property. But this would not cover your personal items, so it’s worth considering taking out your own contents policy.

Some golden rules

Insurance is there to help you manage life’s challenges and you should consider the following when taking out a home insurance policy:

You contribute too
You will be asked to pay an excess when you make a claim. This may be a set amount, or you may have the option to choose a higher amount in return for lower premiums.

There are limits
You will be covered up to a set total amount for both the building and content components of your home insurance policy, so make sure that your limits are high enough to cover the cost of replacements.

Single items
A policy will have an upper limit for single items too. You may, for example, have total contents cover for £50,000, individual items may have their own limit – usually a few thousand.

Times are a-changing
It’s a good idea to reassess how much your contents are worth every year when your policy comes up for renewal – it’s surprising how quickly you collect new clothes, gadgets, furniture and jewellery. Let your insurer know of any changes – particularly if you win the lottery – as being under-insured could mean you do not have the right level of cover for any future claim.

Don’t dislodge your claim
Most insurers assume that only you and your immediate family will live in your home. If you plan a more unusual arrangement, such as taking in a lodger, sub-letting while travelling or leaving the property empty for a long period, this may might affect your policy, so check with your insurer as soon as possible.

What you need to know

When you shop around for home insurance, you’ll be asked a lot of questions about your property, your possessions and yourself – and it’s your job to give the right answer.

So we’ve put together a ‘pre-purchase’ guide to home insurance to make the process a bit easier.

Step one: Make a list

Grab a pen and paper and take a walk around your home – this helps you to see what you might need to replace. Look at what your home is made of, the kind of lock on the front door, whether there is an alarm (the dog doesn’t count) and if there is a separate external front door.

If you’re not sure – it’s not always easy to see what the roof is made of, for instance – ask a neighbour if they’ve climbed on the roof to check for their own insurance purposes or check Google Earth to see if your property can be viewed from above.

Don’t forget your belongings. Avoid undervaluing your contents by totting up how much your furniture, electronics, jewellery and other items are worth in total. Our contents calculator will help you keep track of the total – and make sure you haven’t forgotten the curtains or your expensive pots and pans.

Then look at how much your most expensive possessions are worth, individually. A ring or bicycle valued at £500 is likely to be covered under the standard policy, but if they are worth £5,000 you will need to let your insurer know so they can arrange additional cover.

Step two: get personal

Ring around and ask different insurers about their policies. Comparison websites are convenient, but you don’t get an opportunity to chat with a person and ask more in-depth questions.

This will help you to understand:

  • How policies differ (and how this impacts on you)
  • Which options appeal to your personal attitude to risk (you might realise you are accident prone)
  • Where you get value for money for your premium (cheapest is not always best), and
  • Where you have special requirements that an insurer needs to know (even if they don’t ask).

Step three: the extras

Decide which level of cover you need and pay attention to the fine print.

  • You may have adventurous children and decide that you would like to add accidental damage cover. This would cover permanent marker damage to a sofa, but would you be able to replace the whole suite?
  • Do you carry a lot of valuable items, such as a laptop or tablet, when you’re on the move? It may be worth exploring how much is included as standard or if you need to add optional personal possessions cover
  • If your home was suddenly flooded by a burst pipe, would your insurer offer you alternative accommodation? If your mum lives nearby, you may not need this feature
  • Are you hosting your first family Christmas this year in your new home? You may consider taking additional home emergency cover so you can get help to fix a burst pipe or broken boiler, fast
  • Legal assistance insurance can also offer peace of mind.

Step four: it’s your job to check

Finally, once you have purchased your policy, you will be sent policy documents and a schedule with details of you and your property.

When your policy paperwork arrives, don’t shove it in a drawer. Read everything carefully.

Let your insurer know if any detail – no matter how small – is incorrect. Check you’re happy with the level of cover you have chosen and store the documents in a safe, but easy-to-remember location.

Get the cover you need

Whether you’re a first-timer or seasoned property buyer, why not find out more about how Nationwide’s home insurance measures up?

Nationwide home insurance policies are underwritten by U K Insurance Limited.

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