One of the most challenging parts of buying your own home is the home insurance that will come with it. You might not be up to date with all that is involved with house insurance and why would you be? Until now, you blindly rented – and now you have to be a grown-up and find the right house insurance.
Here’s the thing; According to Kin.com home insurance is divided into three different types of insurance:
- Contents insurance
- Building and contents cover
- Buildings insurance
It’s a lot to get your head around if you’ve never dealt with home insurance before, but don’t worry, we’re going to go through it all with you in this article. The type of policy that you choose for your new home is mostly a personal preference, but it also comes down to the advice you get from mortgage lenders along with your personal preferences!
Some mortgage lenders like borrowers to take building insurance for the entirety of their repayment period. Insurers will usually let you choose how much you pay toward your insurance in return for a lower premium overall. There are three things that you should watch out for when choosing your building’s insurance policy, so let’s explore them all!
This is the amount of money that a policyholder will have to pay towards a claim that could be made. Good policies will be able to offer you excesses up to £100 and insurers will let you choose the amount that you want to pay. The higher the excess, the more you pay for every claim.
There are two types of excess, compulsory excess, and voluntary excess. Compulsory is set by your insurance provider and voluntary is what’s agreed between you! A balance must be struck here as you want to increase your excess to save premiums, but you don’t want to get a bill you can’t pay!
Accidental Damage Cover
Accidental damage excess could be a consideration for those who have accidental damage cover. Good policies will give no extra excess but escape of water access is another thing to consider. A good policy wouldn’t include an extra excess for claims on cover of this type.
There are insurers out there who won’t cover water damage in your house because the bath overflowed or the sealant around the bath/shower isn’t secure. Understanding what the accidental cover will cover is important! A one-off incident can harm your property or the contents, and general wear and tear can also be excluded.
You won’t be covered for mechanical failure, either. So, if your computer is smashed by something flying they may cover it, but if you drop it and it breaks, no coverage.
As part of your accidental damage claim, you have to consider whether young children would be covered. A lot of home insurance policies won’t cover the smashed TV that is caused by the children, so you need to consider this if you have kids running around.
Are animals a feature in your home? Well, you should read up on your home insurance cover to know whether your insurance provider is going to cover the damage caused by chewing, fouling or scratches.
If there is damage in the house caused by vermin or a flood, you may not be covered here, either. Do as much research as possible into what’s included in your home insurance accidental cover, especially if you live in a state like Florida.
Property Rebuild Cost
Your policy provider could as you to input the rebuild cost of the property, and this is necessary as part of getting a home insurance quote. This is the cash that will be needed to reconstruct your home from the foundations up if it was permanently damaged.
This includes the two main factors: material costs and the cost of labor. A rebuild cost is often lower than the value of the market and it doesn’t include the cost of the land on which your house is built. This isn’t the same as the actual property value, though, as this doesn’t include the land costs.
Always estimate your building costs carefully, as this way you can ensure that you are covered properly and you don’t pay as much as you think you will on your premium.
Each of these three things need to be considered when you choose the insurance policy for your building. Slow down and do some research: buying a house should be as much fun as it is stressful!