There are few things certain in life – death, taxes and if you’re a homeowner, buildings insurance. According to the Association of British Insurers (ABI), in 2018 property insurers were paying out an average of £7.8m a day (1) to repair homes and replace contents, and yet how many people actually read their policies and understand what they’re covered for?
At Clayton-Welch Associates we provide home insurance cover for many of our clients, so here’s our brief guide to check whether you have the proper cover and if you could be claiming against your policy.
Buildings insurance covers damage to the structure of your home - walls, roof, floors, windows - but it usually also covers fixtures and fittings. We include as standard accidental damage to windows, underground pipework (oil, water supply, gas), drains, cables and sanitary ware in our buildings insurance policies.
We find it common for people to over insure their property because they have cover based on the sale value of the property, rather than the cost to rebuild. This is a good point to start when you’re deciding how much to insure for when it’s that time of the year to renew.
Buildings insurance can also come with other options to ask for if you believe you need it:
- Accidental damage. Visible damage, not caused deliberately, including putting a foot though a ceiling while carrying out DIY, because there is an element of accidental damage included in building ins)
- Legal expenses. This provides you and your family over to pursue or defend a legal claim.
- Home Emergency. Cover for an unexpected event in the home requiring immediate action, such as making your home safe and secure, or restoring utilities.
If a client has arranged a mortgage or remortgage through us, then we’re in the ideal position to know the rebuild cost from the lenders valuation so we can ensure they have the correct cover in place or guide them on how to find out.
Last month the ABI reported that although the cost of home contents insurance had fallen to a record low, one in four UK households still remained uninsured for contents cover (2).
Contents insurance covers loss or damage to things in your home that are not part of the structure or the building and it is not a legal requirement to have any, although we recommend to our clients that they should cover contents because it provides such wide ranging protection. We normally include accidental damage cover for certain technology and home entertainment equipment as standard.
There are different ways to calculate the level of cover you need, from counting the number of bedrooms in your home to working out the value of your contents, or even buying a policy covering all content without limits.(they will always have a limit but we can get higher cover than 75k with CETA). However, we like to start by getting clients to imagine taking the roof off their property, turning it upside down and working out the value of everything that falls out!
In addition, you may want specific cover:
- Accidental damage. Damage not caused on purpose or inevitably, for example, spilling a glass of wine on your carpet.
- Specified Items within the home. Individual items kept at home and valued at over £2,500, usually jewellery, artworks or electronic equipment should be specified in your policy to avoid a claim being rejected.
- Personal possessions insurance protects your whole family against lost, theft or damage of your personal possessions while your away from home. Specified high value personal possessions is available for items which are individually valued over £2,500 (musical instruments & sports equipment are excluded if damaged in the course of play)
- Additional specified items. This may be needed for phones worth more than £250 and bikes over £500 which you take away from home.
Insurance policies can also meet specific needs, such risk of flooding, thatched roofs, high value personal possessions or you may need insurance as a landlord, or insuring an empty home.
Whatever your situation, applying for home insurance should be more than a hurried box ticking exercise. Take some time out to think about what needs covering and what your risks are; it’s important to get the level of cover right.
If you are underinsured, insurers may on only pay a proportion of your claim, even if what you are claiming is within the insured limit.
Property buying support from Clayton-Welch Associates
Clayton-Welch Associates is a mortgage broker specialising in offering professional, impartial support to people who need a specific type of mortgage or who have experienced difficulties with mainstream mortgage lenders in the past.
We have also built up the experience needed to offer advice and support for our clients when it comes to determining their insurance needs and level of cover.
We work with a comprehensive range of providers from across the market to help clients find the right mortgage, income protection and insurance products for residential and buy-to-let properties.
Your property may be repossessed if you do not keep up repayments on your mortgage.
We rely on referrals for our business, so customer service is the foundation of everything we do. We are passionate about finding you the mortgage you want and we accompany you through every step of the way to a successful application.
Find out how we can help you to maintain your mortgage repayments through income protection by contacting Clayton-Welch Associates today.
- ABI UK Insurance and Long Term Savings Key Facts 2018 www.abi.org.uk/data-and-resources/industry-data/uk-insurance-and-long-term-savings-key-facts/
- ABI news release dated 1 February 2019 www.abi.org.uk/news/news-articles/2019/01/cost-of-home-contents-insurance-falls-to-a-record-low-yet-one-in-four-uk-households-are-uninsured/
*On clicking the above links you will leave the regulated site of Clayton-Welch Associates Limited. Neither Clayton-Welch Associates Limited, nor Sesame Ltd, is responsible for the accuracy of the information contained within the linked site.
**The FCA does not regulate some forms of buy to let mortgages.