Common Home Insurance Mistakes

Insuring our house and our belongings should be straight-forward, especially if you believe what you see on the television adverts.

But not all policies are the same and this can be the cause of the most common home insurance mistakes people make. Hopefully this article will help you to avoid any problems should you ever need to make a claim on your house policy.

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Under-insurance; Buildings Insurance

Your buildings sum insured needs to fully reflect the cost of rebuilding you house should the worse happen. It needs to take into account the cost of clearing away all the debris, drawing up plans for the rebuild and of course the full reinstatement itself.

If your property is listed, old or of an unusual construction then this needs to be taken into account.

There is a useful calculator on the Association of British Insurers website. If you are in any doubt as to the sum insured you need you should seek a professional valuation.

Failure to insure with an inadequate sum insured will lead to your claim being adjusted to take into account the rate of underinsurance. This adjustment is known as the application of the condition of average; it can be an expensive home insurance mistake.

Please remember, the market value of your home is not a guide to the buildings sum insured you need.

Under-insurance; Contents Insurance

Again the sum insured must reflect the full cost of replacing all the contents in your house. The simplest way to do this is to go from room to room and add up what you have in there and then to add an uplift to this to take into account all the things you have missed or under-valued. It can be a time-consuming exercise but one which is very worthwhile and you will be surprised as to just how much your contents are worth.

If you are under-insured, the condition of average will apply and your claim will be adjusted accordingly.

Personal Possessions cover

This section of your home insurance policy covers your possessions whilst outside your home. As well as having a maximum limit anyone claim, many policies contain a single-article limit. Check that this limit is adequate for your needs.

Accidental Damage cover

Some insurance companies include this as standard whereas others will only include it at your request in return for an additional premium. To make matters confusing some policies offer as standard a form of limited accidental damage cover. They include it for electric goods and white goods, but not for the rest of your contents. These differences in cover can lead to costly claims not being covered, so check carefully.

Fine-art, jewellery and other valuables

Your policy may contain a single article limit in respect of these items. Your insurer may insist on items with a value higher than the single article limit being specified on the schedule (in exchange for an additional premium of course), require jewellery to be kept in a safe, impose security requirements or even not be able to offer any cover at all.

Cheapest is not the best.

Home insurance should not be, despite the best efforts of our industry, just another commodity to buy online. The policies vary so much and you need real advice to ensure that the cover you have is suitable for your needs. Things to consider in addition to the above include:

  • Alternative accommodation – what happens if your home becomes uninhabitable?
  • Inner limits for important considerations such as trace and access, loss of metered water, loss of oil, etc
  • Cover for the garden and garden equipment
  • Cover for bicycles
  • Cover for student’ possessions away from your house.

I hope this article will help you to avoid making any costly home insurance mistakes. For further advice please do contact us.

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