Home Insurance Guides

There are two important factors to consider when it comes to insuring your home. There is the building and there are its contents. Make sure you understand we are talking here about both but each is separate.  Their names explain the situation. One covers the bricks and mortar, your actual house, and the other covers furniture and things inside your house. And just to avoid any confusion, sometimes things outside your house are covered in your contents as well; but more on that later.

It’s all about money

Insurance is many things but money is one thing that is certainly front and centre. You pay money in the form of a premium and you get money if you have a successful claim. But the two are related. You have to state the amount of cover you require. If you agree to a cover for your contents for say $30,000 and your house and all your contents are destroyed in a terrible fire, your contents cover will only amount to the agreed sum. If you produce receipts showing you have $40,o0o worth of furniture and equipment in your house well too bad. That’s called under insuring. Obviously if you insured for all the contents then you would have paid a higher premium. If you under insure you may only be allowed to claim the percentage of your cover.

Then we come to the building itself which has nothing to do with the contents. On the surface that may look pretty straightforward. But that’s not the case. You might think that the current value of your house is $X and so you insure for that amount. That’s not how it works. Building insurance includes a number of things, some or all of which may apply in the case of you making a claim.

For argument’s sake, and one hopes this never happens, your house is ravaged by fire and is badly or totally destroyed. Your costs will be to knock down any structure which remains and clear the site before you can even think about starting to rebuild. Is that part of your insurance cover?

Then where will you live while all this is happening? Remember to build a new house can take several months. Who will pay for your accommodation during this period? Is that covered in your building insurance policy?

And a house does not simply spring up from nowhere. You will need an architect or a draughtsman and council approval, etc. All these things can take time and certainly can cost money. So when planning your home insurance building policy, make sure you have all the bases covered.

Now coming back to contents, I mentioned at the start that you need to be specific about what is actually covered. Claiming X as your possession is not enough. And if a certain item is to be insured for a certain amount, say $5000, you will need to specify that item or items on the policy.

Insurance can be tricky and it is always wise to ask as many questions as you need to ask. I mean if your garden is destroyed, the plants in the ground may not be covered but the plants in pots may be covered.

Take your time and seek expert advice to ensure you get what you need and that what you pay covers what you think it covers.