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
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.
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