Home Insurance

By: Leon

Home Insurance

Also known as property insurance, this is a mandatory insurance with a mortgage and you must have it in place. With a re-mortgage even if you already have insurance the solicitor will ask for buildings insurance that is covering the up to date rebuild cost and that the name of the new lender is on the insurance schedule document. You may have to produce the paper work before hand as evidence or sign that you have this in place before mortgage completion. On a purchase, property insurance must be in place on exchange of contracts, so even before you actually move in, as your are then at that point legally bound to the property.

The rebuild cost of your home is the cost to totally rebuild your home from new. An example of this would be if your house burnt down then the cost would have to cover clearance of the plot and a complete new house to be built. People may believe it is the current selling value of the house which is incorrect as only the rebuild costs are covered which would often be far less than the value of sale as this would include the land in the valuation.

Some insurers or policies may cover your required temporary accommodation costs and legal costs.

Accidental cover would include the building's permanent fixtures and fittings for example the bathroom suite, toilet and decoration. It includes the items that would generally stay with a house on sale of the property.

Some lenders will charge you for not taking out their insurance, if the property has had subsidence or flooding then you may only be able to use your mortgage lender for building's insurance as this is seen as high risk to insurance companies.

The property generally may only be used for residential purposes and have to be occupied by you, it will not cover a rented property. Home insurance will be more expensive if you claim and specialist insurance may be required for unusual construction types like a thatched cottage.

Contents insurance explained

This covers all contents of the home and personal possessions but beware there are restrictions. Expensive items over a certain amount may increase the premiums or even be excluded. There are restrictions and extra costs for items that are taken from the home or are more vulnerable for example possessions in your garden shed.

Again you may consider accidental cover for example breaking a television screen by accident. Loss adjusters may wish to visit the property with higher claims and request several quotes for repair. Old age and general wear and tear will not be covered.

Please note contents are normally covered up to a certain value within a standard policy and you should always ensure that you a have enough cover in place to cover all your possessions, this may mean an increased premium would be payable above the standard policy. It would be also prudent to check the policy documents for a full explanation to the levels of cover within the policy.

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