Monday, 29 April 2013

Home Insurance 101

There are many important financial products that we need to purchase in our lifetime, from our first car all the way through to our dream house. With these important firsts comes a responsibility for protecting them, making home insurance an extremely imperative form of cover. It will give you the peace of mind of knowing that if any financial loss was to come to your home, you would have the finances to help in your time of need. Home insurance in general covers damage or destruction to the structure of your home as well as the contents/belonging you have stated on your policy. This will usually come in the form of buildings and contents insurance, which is the first and most important insurance policy you need.

As with many financial decisions, choosing the right insurance can be a confusing mine field to navigate. With this in mind, here are the basics for securing your home.

Buildings and Contents Insurance

Buildings and contents insurance comes under the general heading of home insurance and in short, covers any damage that may come to the structure or contents within your home. This is never more important than in this age of financial insecurity, when our pay cheques and mortgages are already stretched to the limits. A buildings and contents insurance policy is the number one policy any homeowner needs, but they are also advised for those of us living in rented accommodation.

The buildings cover spreads out, to securing your home in the case of a disaster to situations when your home may be so severely damaged that it will need a complete rebuild, say due to an earthquake or fire. The damage caused will usually only be covered if the event was completely out of our control, which is why this form of insurance is so greatly needed. Make sure that when you take out your policy, it is for the total amount of a rebuild and not just for the amount of your mortgage, as this may be less and you may end up having to spend more to meet the building costs.

Contents insurance covers all the items in your house that are not directly attached to the property. It won't cover your sinks for example, but it will cover your furniture, TV, clothing and so on. This form of insurance will cover the costs incurred if you needed to replace items due to damage not of your own doing. This could be flood damage, smoke and any items that get stolen or vandalised. In short, this will cover your contents for most of the same reasons as your building insurance will cover.

In order to make sure you get the right policy for you, it is important to get a variety of home insurance quotes. This will give you a broad over view of what exactly is available to suit your needs.

Add-ons to your policy

This is the moment that you can add on separate parts to your policy to make it exactly right for your needs. For example, if your home is on or near a flood plain then you may find you want more cover than a basic home insurance plan gives you. In this instance, you may want to see what flood cover you can add onto your policy that will cover you in the event of the worst happening. This is where you will need to research or contact your existing insurance provider such as Swiftcover to see what added extras they supply. Here are some general add-ons that many people are turning to in order to get the most coverage from their plans.

Accidental Damage - This can be any damage caused to your home by yourself, your children or visitors that you need to pay for, such as a ball though your back window or damage caused by DIY. Sometimes this will also cover accidental damage to your contents, but this does vary upon which provider you choose, so it may be worth checking before you sign on the dotted line.

Fire Damage - Fire damage is one of the most popular forms of extra insurance coverage, especially for homes that use gas appliances. This will cover you, if a fire is caused by accident within your home, a cooking incident or an electrical fire for example.

Home Emergency Cover - This is a fairly new form of insurance, but home emergency cover is great for when you need something to be sorted at a very quick rate. For example, if your washing machine breaks down when you need it the most, you can ring the helpline with the likelihood of getting it replaced within 24 hours. Obviously the washing machine needs to be covered in your contents insurance.



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