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Insurance - What’s Covered? - Policy Details
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Everyone
wants cheap
home insurance,
but given how valuable a home is and its possessions are
likely to be it’s just as important to find the
right level of cover.
However, policies can
vary widely between insurers – so what can you expect
to be covered on a standard policy and are there any policy
exclusions to watch out for?
What
levels of home insurance cover are available?
There are two areas of
home insurance which can either be bought individually
or combined – they are:
Buildings insurance: This
covers the structure of a home along with its permanent
fixtures and fittings. Some buildings insurance policies
also incorporate outbuildings, as well as underground
pipes and cables, and glass in doors and windows. Usually
your home will be covered against damage from floods,
fire, storms, theft, malicious damage and subsidence.Contents
insurance: This protects the possessions in your home
that aren’t permanent fixtures and fittings. This
can include everything from frozen food to televisions,
CDs, clothing, furniture and carpets. Typically these
items will be protected against risks such as theft, fires,
flooding and vandalism.
Crucially, home insurance
policies vary from insurer to insurer and the level of
cover you receive is dependent on which policy you choose.
Many insurers offer ‘standard’ cover, which
is cover you automatically receive, and ‘optional
extras’ – additional cover you can choose
to pay extra for, such as extended accidental damage cover,
legal assistance and pest cover.
Are
there limits placed on the policy?
Some companies offered
unlimited cover but generally there will be a strict policy
limit placed on both your buildings and contents insurance
– this is the maximum amount an insurer will pay
on a claim and is known as the sum insured. It’s
important to make as accurate an assessment of your property
as possible to ensure the level of cover is appropriate
– over estimating may mean you pay more than necessary
on premiums, but under estimating would mean that you
don’t receive a sufficient payout if a claim is
necessary.
In addition to an overall
limit there will usually be caps placed on how much you
can claim for certain risks. For example, you may have
£5,000 of electrical items in your home but only
insure them for £2,000. This means that if a burglar
raided your home and took all the electrical items you
could be left out of pocket by £3,000.
Most insurers also apply a single item limit – this
is a cap on the amount you can claim for one item. Usually
this is set at around £1,500. If you have any items
in your home that are worth more than that, they should
be listed separately on the policy.
Is
there anything you won’t be covered for?
Most home insurance policies
set out exclusions in their terms and conditions –
these are circumstances for which they will not offer
a payout. Typical exclusions include:
Loss or corruption of
items such as computer hardware caused by a programme
designed to cause loss, or by the failure to keep adequate
back-up copies.Loss, damage or liability resulting from
terrorism.
Gates and fences are normally
excluded from flood damage cover.
Pollution or contamination
unless it arises from a sudden incident.
Insurers may also refuse
payouts if they deem that you have been negligent –
i.e. an insured event could have been avoided if you,
as the homeowner, had taken suitable action – or
have been untruthful. Examples may include:
Not using your burglar
alarm after telling your insurer you have one.Being burgled
without a forced entry – such as because you have
left a door open.
Leaving your home unoccupied
for longer than the specified limit (typically around
30 days).
Using your home as a place
of business without informing your insurer.
So
how can you find the level of cover you need?
To find an appropriate
level of home insurance cover you should shop around using
a comparison website. By accurately entering your details
into one of these online tools it will return quotes from
more than 50 insurers with the cheapest deal listed first.
Crucially, you should look beyond the cheapest deal and
examine the terms and conditions of any policy you’re
interested in to ensure you’re getting the right
level of cover at the right price.
You don’t have to
sacrifice cover to save money on home insurance –
there are other ways to save including:
Improve security: Fit
insurer-approved security devices such as alarms, time-switch
lights, CCTV cameras and security lighting.
Increase your excess:
Increasing the voluntary excess can lower premiums although
it should only be set at an affordable level.
Neighbourhood Watch: Join
a Neighbourhood Watch scheme and you could cut premiums
by as much as five per cent.
Pay annually: You can
avoid interest charges on monthly payments by paying for
home insurance annually.
Reduce fire risk: Fitting
smoke alarms, quitting smoking and installing fire extinguishers
in your home could reduce your premiums.
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