Even without the Euros, insurance arguably ranks well behind football in terms of fun topics of conversation; nevertheless, getting the right home insurance can make a big difference both to your peace of mind and your finances. Here are some helpful tips on making the right decision.
1. Consider buying buildings insurance and contents insurance from the same provider
Basically this will eliminate the possibility of two insurance companies bickering over who is responsible for paying out in the event of a claim, leaving you trapped in the middle.
2. Understand what is and isn’t covered
In terms of buildings insurance make sure you are clear on whether the potential pay-out is the rebuilding value of your home (the value of the bricks and mortar) or the purchase price of your home. There’s a good chance it’s the former, which means that if you base your cover on the latter, you could end up paying a whole lot more than you need to for cover which is much less than you think it is. In terms of contents insurance, in addition to the overall level of cover, pay particular attention to any exemptions, limitations or specific requirements for particular items, typically ones which are very much targeted by thieves. Common examples of these include certain electronics (such as mobile phones), jewellery, money and bicycles. In some cases it may actually be worthwhile excluding these items from your home insurance and getting specialist insurance instead. For example, you could exclude bicycles from your main home insurance and get a specialist policy which covers you for theft from inside and outside the home, plus public liability in the event that you have an accident. You also need to be clear on where you stand with regards to items kept in outbuildings such as garages and sheds.
3. See if you can reduce the cost of your home insurance by improving security in your home
Insurers are likely to demand home-owners guarantee a certain level of security as a condition of their cover. For example this could include having a certain standard of locks on doors and windows. You may, however be able to reduce the cost of your cover by taking additional measures such as installing a proper home safe. Even if this does not reduce the cost of your cover, it may still be the best place for irreplaceable items such as jewellery with sentimental value.
4. Be clear on the type of cover offered
There are basically two types of contents cover. New-for-old cover is essentially what it says. If an item is damaged, it will be replaced with an equivalent item (or the cash value thereof). With indemnity cover, you are compensated for the estimated value of the item at the time it was damaged (or destroyed). This takes depreciation into account and therefore may not be nearly enough to purchase an equivalent item new.
5. If you do any work from home make sure you’re covered for it
Insurance companies have long since caught onto the idea that these days many people have some sort of home office, even if it’s just for managing the household finances and perhaps doing a bit of work from home now and again. If, however, you are doing anything more than that, then it is strongly recommended to check where this leaves you in terms of your policy. In particular, if you are actually running a business from home, then, as a minimum, your insurers will probably want to know about it. If your business essentially involves you working alone at a computer then it is unlikely to make much of a difference to your premiums, but if you are using expensive and/or specialist equipment and/or receiving clients or other visitors, then it is very likely to have an impact as insurers will probably perceive it as a higher risk.