Buying home insurance

How Much Home Insurance Cover Should I Buy?

Whether you are a first-time buyer or moving house for the seventh time there are many important considerations to think about. Not only do you need to pack your home and arrange for shipping for your possessions, but you also need to buy home insurance for your new property. You have made a large investment, and now is the time to protect that investment. If you have taken out a mortgage, the lender is going to insist that you buy home insurance cover because the mortgage company wants to protect its investment as well. In the event of damage or destruction, you may be faced with choosing between rebuilding your home and paying off the mortgage loans.

Home insurance policies are made up of two parts: buildings insurance and contents insurance. While you can buy each policy separately, many home insurance companies offer the policies together for a discounted rate. You need to think about your budget and your needs when you are deciding just how much cover you should buy.

Buying buildings insurance is extremely important as it provides cover for the property itself and its permanent fixtures. Walls, ceilings, roofs and kitchen and bathroom fittings are all covered under this policy. It provides protection for you in the event of subsidence, flood, fire, vandalism or water damage.

When you are buying cover for your new home and you are a first-time buyer, make sure the policy begins on the day you sign the contract. If you have bought a home in the past, you can arrange for your previous insurance company to cover the home up until contracts are exchange, just in case the deal does not continue.
You may also be able to buy your buildings insurance through a joint policy if you live in a larger building like a block of flats because everyone will need to have some type of insurance. Make sure you ask around and see what your neighbours are paying.

Because the values of properties are ever changing, it may not be truly clear how much cover you should buy for your home. It is not necessarily the market value that you should take into consideration, but rather the amount that you would have to pay to rebuild your home that allows the insurance company to view it as a “stable” property. For instance, providers look at labour, the cost of building materials and how much surveyors’ and architects’ fees would be, as well as the cost of clearing rubble and other debris.

Contents insurance protects your possessions and valuables within your home. Determining how much contents insurance to buy is a somewhat simpler process, although still not easy: make a list of everything in each room of your home, its value and how much it would cost to replace it. Include all fittings, carpets, furnishings, food, clothes, jewellery, electronic equipment, entertainment devices, sports equipment, bicycles, musical instruments and so on.