Insurance is one of the most boring subjects in the world, but its importance cannot be overstated. And the policies on offer can vary wildly between providers so it’s worth shopping around.
Five Point Plan
Speaking to a specialist adviser before you buy insurance could pay off. Make sure your adviser offers policies from a good variety of insurers and do a little research yourself on the internet before you start discussions.
Don’t just take the first product your lender offers. Shop around independent providers for the best deal.
Don’t forget to budget for your monthly insurance payments. The younger and healthier you are, the lower your life insurance costs, but payments can easily add up to over £50 a month even for young mortgage-holders.
Find out what your excess is. Also, remember to find out what the exclusions are. Remember, an excess of £250 on home contents insurance effectively makes you liable for smaller claims like broken windows, changing the locks and accidental damage to older TVs or hi-fis, for example.
As your circumstances change, don’t forget to update your insurance. If your insurance policies don’t reflect your life exactly, you and your dependents may not be protected in the event of unemployment or worse, a sudden death.
Few people spend money on anything more expensive than their home. This is why it’s worth making sure you protect it against all eventualities, from a missed mortgage payment to a freak lightening strike.~
With some types of insurance the premium or price you pay, may reflect the quality of the policy you are buying.
Also, take note of the exclusions, which are often more revealing than the terms and conditions.
This insurance covers the basic structure of your property and is the only insurance you legally have to buy, although as protection from accidents, all property owners should have it.
The cost will depend on the age and type of the property, its location and whether there is a history of subsistence in the area.
Mortgage lenders oblige you to protect both your own and their investment, so this insurance has to be in place before or on the day you move in to the property.
The insurance covers roofs, walls, fences and permanent fixtures like kitchens and bathrooms.
Accidental damage caused by fire, storms, or burst pipes, for example, will also be covered.
If you live in a flat, the insurance may be included as part of the service charge – a benefit because you don’t have to worry about it, but with the downside that you don’t have the chance to get a better deal – it’s not such a big deal for managing agents, who feel they have bigger fish to fry.
This insurance offers cover on the household goods and possessions inside your property, including the garden if you have one.
Policies offer cover on a ‘new for old’ basis, so if anything happens to your curtains, lawn mower or stereo, you should be able to replace damaged goods with a new model.
Cash in your home should be covered from theft or smoke damage, for example, as is accidental damage to TVs, home computers, or replacement locks and even possessions damaged outside the home. Extras like accidental damage cover can be useful protection against DIY disasters. If you have pets, your policy may exclude any damage caused by them.
Following severe floods over the last few years, some householders are finding it increasingly difficult to get insurance on their homes. Generally speaking, insurers won’t withdraw cover in normal circumstances, but you may find switching providers more difficult if your home is now in a danger area. At the very least, your premiums, or your excess will be much higher.
If you’re looking to buy a home, it’s always worth checking what potential premiums will be.
In many cases, you’ll be able to ask the person you are buying from what their experiences are. They may be able to point you towards the best deal. But if they don’t want to talk about it, then it’s worth looking closely at why they remain tight-lipped.