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Article by Robert Gray

Copyright (c) 2011 Robert Gray

Home insurance is vitally important in order to protect you from life’s unexpected events, such as floods, fires, theft and damage. This article looks at exactly what home insurance is, the two main types of home insurance, what is covered under a typical policy, whether you are obliged to have home insurance and the consequences of not having home insurance.

Home insurance is a type of insurance policy that covers your home and your belongings in the event of fire, floods, damage and theft. There are two types of home insurance – buildings insurance and contents insurance, and they will both help to protect you.

Buildings insurance.

Buildings insurance covers the actual ‘bricks and mortar’ of your home. It offers insurance cover in the event of floods, fire and subsidence. As well as covering your actual property most buildings insurance policies also extend their cover to outbuildings such as sheds, greenhouses and garages. Also, depending on the particular insurance policy, you may be covered for any damage to your fixed fittings such as bathroom or kitchen appliances. The policy will usually cover you for up to what it would cost to completely rebuild your home. You should check an insurance policy carefully before you take it out to ensure that you receive the amount of cover you require. For example, if you live on a flood plain you should check how this will affect your insurance cover in the event of flooding – would you still be covered?

Contents insurance.

Contents insurance, as the name suggests, covers the contents of your home. This can include everything from electrical appliances and carpets to items that you may sometimes take away from the home, such as cameras, bicycles and jewellery. You will need to list any specific items that you wish to be covered, for example an antique ring, with your insurance company otherwise that item may not be included in the cover. As with buildings insurance, you should shop around for the most competitive quote (checking things like policy excesses) and ensure that you receive the amount of cover you require.

Whilst some mortgage lenders may insist that you have an insurance policy in place before they will agree to the mortgage, they cannot insist that you take out their own particular insurance – you are free to shop around and choose the deal that is best for you.

The consequences of not having a home insurance policy in place may be devastating. In the event, for example, that your property is flooded or items are stolen, and you do not have adequate cover in place, you will be left to foot the bill.

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