Property Bump

Whilst we know that home insurance is of the upmost importance for all homeowners, the consequences of underinsuring your home could lead to the policy not being worth the paper it is written on.

Home insurance is split into two parts – buildings insurance, which protects the structure of your property and its permanent fittings such as your kitchen and bathroom, the other is contents insurance, which protects all your personal possessions. Underinsuring on either of these could lead to potentially disastrous consequences.

Pete Harrison is an expert in home and contents insurance at Money Supermarket who found that one in five homes in England had no contents insurance at all. “”While nobody wants to pay more than they have to for home insurance, failing to properly evaluate your home contents could cost you dear in the event of you having to make a claim.”

What is at risk?

As part of your buildings insurance you will be required to give the total rebuild cost of the property in the event of total destruction. This could be because of a flood, fire or an extreme weather related event.

Remember this is the rebuild cost, not the value of the property so it is worth getting an independent advisor to work this out for you.

According to Chubb insurance, people often underestimate the rebuild cost by between £75,000 and several million pounds.

The same can be said about contents insurance. Research has shown that the average family of four value their home contents at around £25,000, whereas the true value is usually closer to £55,000.

If your home is targeted by thieves or your contents are destroyed by a fire, based on the figures above this could leave you £30,000 short when it comes to replacing your items.

To make sure all your possessions are covered, take a tour of your home with a pen and paper in hand and list all the items in each separate room. Don’t forget to include carpets, curtains, rugs, clothes and linen if they are of value to you.

Keeping costs down

As Pete Harrison said, nobody wants to pay more for their insurance and naturally increasing the amount of cover on your policy will increase your annual premium.

Insurance is all about the risk involved and there are ways of reducing that risk, therefore reducing the amount you pay each year.

Here are some tips to help keep your home and contents insurance costs down.

• Attach a NACOSS standard alarm system to your home. This could reduce your premium by up to 7.5%.
• Joining your local neighbourhood watch scheme could save you an additional 5%.
• Invest in state of the art lock and bolts for your doors and windows.
• Install security lighting on the front and back of your property that detects movement.
• Lock away all your garden furniture and do not leave tools outside that can be used to gain access to your property.
• Increase the excess payment on your policy as this can reduce your premium although make sure it is set an amount you can afford.
• Get rid of any expensive add-ons. Do you really need accidental damage cover?
• Install and regularly check fire alarms to reduce the risk of fire.

Most people don’t give too much thought to their outer property, i.e. their garden – front and back – any alleyway access and garden sheds, forgetting that in sheds for example there can be a lot of expensive possessions, such as power tools, golf clubs, pushbikes and even motorbikes. If you are unfortunate enough to be the victim of burglary, then the safety net of house insurance is some comfort; that doesn’t mean you’ll particularly relish the thought of having to claim on it however, considering your premiums and phone bill will rise as a result. With this in mind, it’s worth taking some simple precautions to deter thefts, some of which are recommended by the police:

• An alarm that is designed specifically for sheds, which usually operate via a key fob or keypad on the unit itself.

• Any tools or equipment that belong in the shed such as lawnmowers, strimmers, garden shears etc., should always be put back after they’ve been used, especially after dark. Ladders in particular should be locked away, due to their propensity for use by burglars to reach upstairs windows in residential areas.

• Bigger items in the shed, such as again lawnmowers, push bikes or heavy power tools, should be joined together with a chain and padlocked to make them more difficult to escape with.

• After the shed has seen any use, double check it is locked before locking the outer doors of the house itself.

Sheds are susceptible to break-ins for many reasons, such as screws which are uncovered, rusty or non-security, old wood that is easily removed sometimes in entire sections, and hasps that also don’t have covered screws.

Where possible, incorporating high hedgerows and solid walls around the property will make it difficult for thieves to take items away from the garden, and using gravel on driveways acts as a natural alarm.

Shed windows should be covered so that potential thieves can’t see what’s inside, and the actual shed building should be placed in view of the back windows in the house, as a hidden shed is a much more tempting target.

Most people don’t think twice about protecting their cars, lives and health with insurance. The reasons for this are obvious, as simple payments each month can result in complete coverage should you find yourself in a medical emergency or car accident. In the same way, home insurance can protect the structure itself as well as your valuable and possessions inside the home. In a family home, this could be thousands upon thousands of dollars of personal items alone, which might be impossible to replace all at once. Here are some of the main reasons why investing in home insurance is a smart choice.

A Place To Stay
After a huge event like a fire or a flood, you may realize that your family, which once had an entire house to call home, now has nowhere to stay at night. A hotel might be an option for a day or two, but that can become very expensive. It might be possible to stay with friends or neighbours, but even that is not a long term solution. If your home is destroyed, you and your family will require a place to stay for weeks or even months. Home insurance protection will allow you to find a comparable place to live while your home is being rebuilt, and cover all the associated costs.

Protect Your Assets
If something happens to your home, not only does home insurance protect the structure, but it also covers the cost of replacing the items within the home. Furniture, clothing and electronics are all covered by insurance policies. While compared to the price of rebuilding a home these items may not seem significant, adding up the value of all your possessions will reveal a staggering number. If possible, keep a list of your belongings somewhere safe outside of the home in case you ever need to recall exactly what was lost in an accident.

Liability Protection
Home insurance also covers a legal aspect of owning your own home. If you, your children or even your pets cause damage in any way on the property to a third party or their possessions, home insurance can cover the associated legal fees and protect your own financial assets should it become an expensive legal battle, or one where you are found guilty for any fines or damages paid. This can give you peace of mind when having neighbours or friends over to your home.

Home insurance is a valuable and important policy to have if you own your own home. A policy can provide you with a place to stay when you need it most, serve as a way to protect the value of your assets, and offer legal help and cover expenses should that become necessary.