Smart Choice Accountancy

Home insurance in the UK – what to know?

Home insurance is aimed at protecting your house and belongings. This policy comes with two main different types: building insurance and content insurance.

Building insurance covers damage done to structure of a house, like walls, roof and floors. It can also provide financial sources for permanent fittings and fixtures. The policy will provide you with a lump sum to cover certain repairs in cases when they are needed due to pre-agreed in the policy circumstances. Typically, those are: vandalism, subsidence, fire, smoke, explosions, falling trees, vehicle collisions, water damage due to leaking pipes, oil leaking from a heating system, flood, storms and other natural occurrences. Building insurance might cover also your garage or driveway.

Building insurance policy won’t cover for claim if damage is due to general usage of the house, so-called wear and tear. Additionally, each policy might put on the exclusions list certain reasons for damages. It often includes leaking gutters, damage done by pests like birds or insects or frost, unless it is caused by leakage from pipe. Also, when your house was left inhabited for 30 or 60 days, your claim also will be denied.

If you own a house, it is highly recommended to get a buildings insurance. Sometimes, you are obliged to buy one, when you get mortgage for purchase of a house or a flat. When you are renting a property, it is not your responsibility, but landlord’s, to insure it.

Content insurance covers content of your house, both furniture and valuables, also devices like laptops. There are three types of content policies, that differ in method of calculating the value of insured objects. Bedroom rated policy means the insurers will estimate the amount and value of content based on number of rooms in your propriety. Typically, the amount covered for will range between £40,000 and £50,000. Sum insured policy lets you make valuation of the amount of cover you require on your own, whereas unlimited sum insured provides cover to any sum, without limits.

Policy for content of your house or flat can vary also in terms of amount provided for your claim. New for old one means that you shall receive only what it costs to replace lost or damage items and is the most popular option among insurers. Indemnity cover will provide you with the money equal to the current value of your belongings. Let’s say you need to replace your sofa for a new one and spend £1000 on it, but your insurer only will pay around £300 because that is how much your old sofa is worth at the moment. Premiums in this policy are cheap but this is less beneficial option.

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