3 min read
When it comes to purchasing your first property, along with the excitement of making the biggest purchase of your life and getting yourself onto the property ladder, there is also the realisation that there’s more to consider than paying a monthly mortgage installment.
Once you have made the decision to purchase a property, it’s important to establish a budget which not only includes what you can afford in mortgage repayments but all the other expenses that are required when purchasing a house.
From solicitor and estate agent fees to your monthly expenditure, including everything from mortgage repayments, rates, electricity, gas or oil, TV, broadband and telephone, mobile phone, food bills, car expenses and savings, it can all get a little overwhelming.
One of the most important expenses to factor in is home insurance, as it gives reassurance when making such a large financial investment.
Mortgage lenders require buyers to have buildings insurance in place as it protects both them and you. Home insurance is not a legal requirement, however it can save you a significant amount of money and ensure that your property and belongings are financially protected, should the unexpected occur.
There are two types of home insurance available – buildings and contents.
Buildings Insurance covers the structure of your property as well as fixtures and fittings, allowing your home to be repaired or rebuilt if it’s seriously damaged.
It’s advisable to have buildings insurance in place from the day you exchange contracts, as you are legally bound to buy the property from that point. If damage was to occur before the day of completion and you weren’t insured, you wouldn’t be covered.
Policies may vary between insurers however it is generally accepted that you can claim if your home is damaged by vandalism, subsidence (if the foundations become unstable), water damage from leaking pipes, as well as events such as storms, floods and fire.
Insurers will have exclusions as to what isn’t typically covered - make sure you seek out this information, so you are aware.
Contents Insurance covers the replacement of your belongings including clothing, furniture and jewellery, if they have been stolen or damaged.
This type of insurance can cover the cost of replacing the items rather than what you paid for them which can vary, however insurers may also offer ‘new for old’ cover for some items.
Both types of home insurance can offer a tailored policy to suit your needs and can also include additional extras.
Many insurers will offer a combined building and contents policy which can often work out cheaper.
The cost of home insurance varies for every customer as it is based on your own unique circumstances. Insurers take into consideration the location of your home, looking at burglary rates and flood risks within the area. Some insurers may also want to know the size of your property and the materials used to build your home to understand how much it would cost to rebuild if it was destroyed.
Other elements insurers will consider are the types of locks you have on your external doors and windows and if you have an alarm system installed, which can reduce the premium you pay.
The cost of contents insurance will be based on how much you state your possessions are worth - the higher the overall value, the bigger the premium you will pay. You may also have to stipulate specific higher value items, including diamond rings, amongst other items but please refer to your policy wording and/or broker as this can vary considerably between insurers.
When it comes to finding a suitable Home Insurance policy, cheapest may not always be the best– you need to make sure your property has the right level of cover in order to rebuild your home or replace your possessions.
When considering your policy, you will also have to determine the amount of excess you wish to set - this is the amount you will contribute towards the total claim payment. The higher the excess, the lower your premium or monthly payment will be, so dependent on your circumstances this can be adjusted to factor in what you can afford.
For most insurances you have a 14-day cooling off period when you can cancel or change your policy without charge. After this period, you are typically locked-in for a year and may incur cancellation fees if you proceed with cancelling.
An insurer won’t cover pre-existing damage to your home, however your home is covered from the day the policy starts, so if your home or contents are damaged as early as the day after your policy starts, you should be covered.
When it comes to renewing your home insurance, leave it with our expert team to do the searching and find a policy that suits your needs.
It’s important to have the right insurance in place to protect your house and your belongings. Make sure you are covered under your Buildings or Contents Insurance.
As your trusted local insurance broker, AbbeyAutoline is here to help. Get a quote online or give us a call today on 08000 66 55 44.
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