Your Home Insurance Policy

Your UK home insurance is one of those things that you might be tempted to pay year on year without giving it a second thought, sticking with the same insurer at more or less the same level of cover out of a sense of inertia. The market in buildings and contents insurance, however, remains so keenly competitive that it might repay reviewing your current arrangements in order to arrange better value for money elsewhere.

Buildings insurance

Your home may well be the largest single investment you ever make. Unfortunately, the truism that nothing is as safe as “bricks and mortar” nevertheless disguises many risks and perils. Your expensive investment might be destroyed or badly damaged by fire, floods, subsidence, falling trees and other debris, vandalism or by vehicles crashing into it. Your UK home insurance, therefore, is typically designed to offer adequate protection against such risks to the physical and structural fabric of the building.

In terms of the adequacy of that cover, it is prudent to think in terms of the worst case and the need for the complete rebuilding or reinstatement of your home. Calculating those rebuilding costs, of course, is rarely a simple matter of the purchase price or market value of the existing home. Even when the land value is taken out of the equation, calculating the cost of rebuilding (especially an older style home) is relatively complicated. Professional surveyors and valuers, however, have ready-reckoners to make the calculation more straight forward.

Nevertheless, to make things even more straight forward, many companies arranging UK home insurance now offer a standard level of cover (that might typically provide rebuilding costs of up to £1 million) whatever the estimation of such costs. In that case, of course, the homeowner may want to be certain that the estimated rebuilding costs are within the insured maximum offered.

Some insurers may also extend very attractive discounts to customers who opt to buy a UK home insurance policy that includes cover not only for the buildings, but also their contents.

Contents insurance

It may come as a surprise to many people how valuable are the accumulated effects and possessions that make up the contents of their homes. The conventional way of calculating the level of cover necessary to protect all of these items against loss or damage is to go from room to room of the entire home, making a detailed inventory of its contents and valuing each item accordingly. This has been probably the most normal way of trying to ensure that the contents of the home are not under-insured (thus risking an inadequate insurance payout for the replacement of belongings totally lost or destroyed).

To overcome such a risk of under-insurance and to make the whole business of arranging adequate cover far easier, however, some insurers may offer an automatic total level of cover for all of the contents. In most cases, this is likely to be sufficient to extend cover for the entire contents of most homes (with a typical level of cover offered at £60,000, for example). Nevertheless, anyone seeking UK home insurance for their contents may consider it prudent to perform their own fairly regular evaluations and re-evaluations to remain confident that the limit automatically set by the insurer remains sufficient.