So you’re buying your new house. You’ve been through a ton of paperwork to get this far, and your mind’s now probably turning to colour schemes and sofas.
But have you taken out insurance to protect your new pad?
We give you the lowdown on what you need to know about home insurance for your new home, along with some tips to help you save money.
What is home insurance?
There are two types of home insurance: buildings and contents.
Buildings insurance covers your new home’s structure: its walls and roof, and permanent fixtures like kitchens and bathrooms.
Contents insurance covers loss or damage to items in your home such as carpets, furniture, electricals and personal belongings.
But the good news is: you probably won’t need two separate policies. Providers can offer a combined product, which might actually be cheaper than buying them individually and we can help you compare these.
Why might I need buildings insurance?
It’s vital to insure your building in case it gets damaged and needs repairing. In fact, most mortgage companies insist that a policy is in place before you move in but remember your home insurance does not need to be bought through your mortgage provider.
Your buildings policy needs to cover the rebuild value of your property – that’s the cost of rebuilding it from scratch, excluding the cost of the land. Don’t confuse it with the ‘market value’, which is the purchase price. Our rebuild calculator will help you with this when you start a home insurance quote.
Other risks that your buildings insurance should cover include, fire, subsidence, heave and flood. According to the Association of British Insurers (ABI), 25% of money claimed on home insurance in 2014 was due to weather, 21% was down to water escape, 13% was because of fire, and 4% was related to subsidence.
Why might I need contents insurance?
It’s not usually a condition of your mortgage, but it’s wise to include contents on your house insurance, in case of theft or damage to your possessions. The ABI calculated that 10% of money claimed on property insurance in 2014 was for accidental damage, and that 13% was for theft.
Contents insurance can be particularly reassuring when moving house. Accidental damage cover can also be included on your policy and might prove handy if you drop your 72” TV on moving day, or spill a whole tin of paint on the carpet while decorating. Just remember that this can be an additional product so might have an additional cost.
With regard to theft cover, there are things insurers will ask you about your new home that may affect the cost of your premium. So making notes when viewing your home-to-be will help when getting home insurance quotes. Check the types of locks on the doors and windows, and whether there’s a neighbourhood watch scheme in the area.
Always compare the level of cover offered in policies. Some only cover the current value of items, whereas ‘new-for-old’ home insurance covers the cost of a new replacement.
What else do I need to know?
When doing a home insurance comparison, check your policy for exclusions like damage caused by leaky gutters, frost damage, and storm damage to fences.
Also, don’t forget to add in any extras you might want, such as home emergency assistance, replacement locks, alternative accommodation or legal protection.
How do insurers work out premiums?
It’s no secret that one of the main factors in the cost of house insurance is location. Your new postcode holds a wealth of information for insurers, from crime rates to local flood and subsidence risks.
But insurers will also want to know about the property itself, including its age, construction, security, and any unusual risks like that stream at the bottom of the garden.
They’ll also take your profile into account. They’ll check things like whether you’re usually at home during the day, and if you’ve claimed on a home insurance policy in the past.
How can I help reduce the cost of home insurance?
There are some things you can’t change, like location; and there are some you can.
Increasing security at your property could bring down premiums, so look into upgrading locks, installing an approved alarm, and joining (or starting) a neighbourhood watch scheme.
Upping the voluntary excess you’ll pay if you make a claim could cut your premium – but make sure you can afford the amount you agree to, including voluntary and compulsory, should you need to make a claim.
Never accept your new mortgage company’s own house insurance quote without shopping around first. Similarly, never auto-renew when your policy’s due to expire.
And when it comes to comparing and shopping around, compare home insurance quotes withcomparethemarket.com. Hit the button above now to see how much you could save. We’ll list out your cheapest quotes from our panel of providers, all in one place.
Let comparethemarket.com help you find your ideal home insurance policy.