You might have considered getting Buildings and Contents insurance for your home, but there is a lot you might not know about it! Together known as Home insurance, you will often find them being sold together but they are actually two separate types of insurance.
Firstly, Buildings insurance covers the bricks and mortar of your home, as well as all permanent fixtures and fittings. It is there to provide cover against unforeseen circumstances that could affect your home, such as fires or floods. Most policies will also cover you against damage from vandalism, and water or oil damage resulting from burst pipes or broken down domestic heating installations. Premium policies will also cover you against accidental damage, such as breakages, and can even extend the cover to your garden!
It is recommended that you insure your home based on the rebuild value, i.e. the cost of completely rebuilding your house from scratch, rather than the market value. Fortunately, the rebuild value is usually less than the market value.
On the other hand, Contents insurance covers everything in your house that isn’t nailed down. To illustrate what we mean by that, imagine tipping your house upside down. Everything that falls out is included in Contents cover. So this includes TVS, laptops and washing machines; all things you probably couldn’t imagine your life without! Contents insurance covers all your possessions against loss, damage or theft, often on a ‘new for old’ basis, meaning the pay out if you claim will be enough to buy an equivalent new item.
The total sum of your Contents insurance should be the total value of all of your home contents. This is to ensure that if all the contents of your home are destroyed, the pay out from your insurance would be enough for you to be able to afford to replace everything. However, every policy will have limits on how much it will pay out if you lose or damage an individual item. If you have especially expensive jewellery, artwork or other unusual household items, make sure your policy will cover the cost of these.
Of course damage to your entire home and all your possessions at once is unlikely, but insurance is all about protecting yourself against things you hope will never happen. Everyone is at risk from environmental damage such as flooding in today’s climate, and you don’t want to be in the position where you’re saying ‘I wish I had taken out home insurance’, should the unthinkable happen.