Arriving home to find your personal possessions have been rifled by a burglar or that a water pipe has burst and flooded your home is every home owner’s nightmare. After a call to the Police or a plumber, the next thing on most people’s minds is ‘where did I put the house insurance policy?’ But does that policy cover your home adequately, or could you be left out of pocket after a disaster?
The difference between home and content insurance. Home insurance policies are often specified as ‘House’ or ‘Home contents’ insurance. Home insurance is usually specifically designed to protect your actual home – the bricks and mortar itself. So if your property is damaged by a flood, for example, home insurance would cover the damage caused to the actual property itself, or in some cases, even help with the cost of accommodation while you wait to move back into your home. Contents insurance is specifically designed to protect your personal possessions – everything from the cooker to your jewellery, valuables and computer equipment. It is this you would claim against if you were burgled or a flood damaged your furniture beyond repair.
However, as with any insurance policy, the devil’s in the detail. Home content insurance may require you to make an inventory of the items of high value you want included, and it’s always wise to read the small print to make sure that these items would be covered on your home insurance policy. One section that often catches out the unaware is the exclusion of any possessions kept in a garage or garden shed. Because these are technically being stored outside the boundaries of the house itself, they may not be covered by your home content insurance. So again, check that small print to make sure that your mountain bikes or garden equipment is covered by your policy.
How do you value a lifetime of memories? There are some possessions that no amount of money can replace. Sadly, modern criminals have no respect for the sentimental value you may place on an item, and unfortunately, neither does your insurance policy. Whereas jewellery may be relatively easy to place a monetary value on, no insurance payout can compensate you for loosing a family heirloom that has great sentimental value. Installing a home security system is a worthwhile investment – it protects your property, gives you a little extra peace of mind and can make a difference to the amount you pay on your home insurance policy. This doesn’t have to be an expensive collection of high-tech security cameras, but any form of defence against burglars will mean a reduction in how much you pay for your home insurance.
An option is to look for home insurance policies that combine both house and contents insurance. This facility is now being offered by more insurance providers as an alternative to buying two, separate policies. These offer a great way to cover all eventualities, and can work out to be considerably cheaper than buying two separate policies. As with car insurance no claims bonuses, the longer you go without claiming against your home insurance policy, the cheaper the premiums become. But if you do decide to shop around for a better deal on your home insurance, do check to see if your new provider offers this ‘no claims’ bonus to reduce the cost of the policy.
It’s difficult to put a value on your home and even harder to place a value on treasured possessions. But whether you’re a homeowner or a tenant, home insurance is an important part of managing your finances, particularly if the worst does happen. Without home insurance, you could be left counting the cost for a very long time to come, so for the sake of a few pounds a year, isn’t it wiser to be safe than sorry? And always make sure you can remember where you put the policy.
