Homes falling into disrepair as austerity measures bite
22 February 2012
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What is covered?
- How much should I insure my contents for?
- How much should I insure my home's structure for?
- Should I just go for the cheapest cover?
- How can I cut the cost of my home insurance?
- Are there any reasons I shouldn't move insurers?
- How much will I get if I claim on my contents cover?
- Are my personal possessions covered when I take them out of my house?
- What happens if I take my possessions outside the UK?
- I own a lot of expensive equipment including a widescreen television and top of the range stereo. Do I need to tell my insurance company?
- Will my bike be covered under my household contents insurance policy?
How much should I insure my contents for?
Don't underestimate the value of your possessions. Go round each room one by one and write down the cost of every single item of value. Remember that one CD may not appear to be worth much, but a typical CD collection may be worth several hundred pounds. When you are doing this exercise, consider how much it would cost to replace each item in the event of a fire.
How much should I insure my home's structure for?
Don't think you can simply insure your home for its market value. The rebuilding cost is not the same as this: for example, in areas of high house prices, rebuilding costs can be lower than market values. You can estimate your rebuilding costs by using a guide on the Association of British Insurers website.
Should I just go for the cheapest cover?
Not necessarily. Accidental cover, for example, could be useful if you have young children. If you've got a lot of valuable possessions or works of art, you might want a specialist policy. Remember that the way a company handles a claim is important: comparison sites sometimes rate customer satisfaction and this can be a useful indicator.
How can I cut the cost of my home insurance?
Firstly, make sure you're not over-insured: check rebuilding costs and your contents value. If you've got accidental cover, ask yourself if you really need it?
Then consider improving your security: insurers will often reward you for better locks, burglar alarms, belonging to Neighbourhood Watch and even having a dog.
If your home is usually occupied during the day, make sure your insurer knows as it could cut your premiums.
If you can, pay your insurance in a lump sum: it will cost less. You could also consider opting for higher excesses.
And even if you don't want to move insurers at renewal time, you should still ask them to review your premiums: if you don't ask, you won't get.
Are there any reasons I shouldn't move insurers?
If you've recently made a claim (or have one ongoing) for something such as subsidence, you could be better staying put with your existing insurer. Indeed, you may find it very difficult to move to a new insurer.
How much will I get if I claim on my contents cover?
This will depend on the type of policy you have. If you have "new for old", the payout will cover the full cost of replacing the item, at the current high street price. If your policy pays out according to the actual value of the item before loss, you will get a much lower amount, based on its age, and depreciation. Don't assume you'll automatically get sent a cheque: many insurers will actually replace items using their own approved suppliers.
Are my personal possessions covered when I take them out of my house?
Most insurers offer extra cover to protect your personal belongings outside the house. However, remember that it is not possible to insure the same item twice under two different policies. For example, if your car is broken into, and items from your house are stolen from it, they should be covered by your car insurance policy, not your home insurance.
What happens if I take my possessions outside the UK?
It is entirely dependent upon the policy. Some personal possession polices will provide cover for outside the UK, while others won't – you will need to check with your insurer for details. If you are covered, you may be able to cut back on aspects of your travel insurance, but it’s still important to have travel cover for costs such as emergency medical treatment.
I own a lot of expensive equipment including a widescreen television and top of the range stereo. Do I need to tell my insurance company?
Most insurance companies have a limit on any one item, which is usuallly around £1,000. A stereo system (e.g. amplifier + dvd player + speakers) is usually considered as one item. If you've got a lot of valuable equipment, you should tell your insurer.
Will my bike be covered under my household contents insurance policy?
This depends on your policy. Some will include pedal cycles up to a limit, typically of £500 per bike, or some will require you to buy a separate add-on in order to be covered. You may have to fit high security locks to bikes, and to make sure any shed they are stored in is properly secured. You should always check the details of your policy - never assume that items such as bikes will be insured.
If your bike is particularly valuable, you may wish to consider a separate cycle insurance policy.
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