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Home Insurance guide

For most people, a house is the most expensive thing they will own. Check out our handy guide to help protect your assets.

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Home Insurance guide

Insuring your property correctly is very important. If a house and its contents were to suffer substantial loss, very few owners have the finances to repair or replace without the help of insurance. But for some homeowners, particularly first-time buyers, home insurance can seem like a daunting thing to get correct. What does home insurance cover? Which home insurance policy is the right one to get for your property? Is it necessary to get contents insurance as well? Luckily, help is at hand. Whether you’re a first-time buyer or already on the property ladder, we here at Brightside have compiled this handy home insurance guide to help anyone arrange their home insurance for both their property and possessions.  

Principles of Home Insurance 

Unlike Motor Insurance – where under the Road Traffic Act it is a legal requirement to have insurance – household insurance is not compulsory. If you have a mortgage on your property, your lender may make it a requirement to have an insurance policy in place. This is to protect their financial interest in your property. 

Your circumstances will largely determine what type of home insurance you need. The basics of home insurance are buildings insurance, contents insurance and a combination of the two. As with most insurance policies, you can also select differing levels of cover based on your individual needs.

Most insurance policies are issued on an indemnity basis. This means you will simply be either reimbursed for the works carried out following a claim or receive the current value of the item. However, household insurance policies differ from this system due to being issued on a new-for-old basis. This means that where you make a claim against any section of your policy you would either get a new equivalent model of the original item or the property would be rebuilt to its original status.

For example, if your property was to be affected by a fire and your TV of 5 years was damaged, you would receive a brand new TV of similar make & model.

Insurable Interest

In general, insurable interest is at the heart of insurance. It means that in order to insure something you must have a financial connection to it, usually ownership. There are two main types of property ownership: Leasehold and Freehold. It is important to know the differences between them so you can accurately choose which cover you need.

Leasehold & Freehold


Leasehold

Is when you own a property for a fixed term but not the land which it stands on. This usually applies to a flat or maisonette in England & Wales. Possession of the property will be subject to the payment of an annual ground rent. The lease will run for a certain amount of years and when this expires, ownership of the property reverts to the freeholder. You can usually offer to pay to extend the lease for a longer time period. 

For example, you may have purchased a flat in a block of four. Usually the building insurance is organised by the freeholder which will cover the entire building. Leaseholders will usually just pay to insure their contents within their property. This is sometimes known as 'renters insurance'.

Freehold

This applies when you have outright ownership of the property and land on which it stands. A freehold estate in land (as opposed to a leasehold) is where the owner of the land has no time limit to their period of ownership. A freeholder will be looking to acquire insurance for the buildings and potentially the contents at the same time.

Levels of Home Insurance 

Standard Cover

Every home insurance policy will usually cover the following standard perils, but we recommend checking with your provider to confirm these specific instances are included in your policy as necessary:


• Fire, lightning, explosion, earthquake and smoke
• Aircraft and other flying devices or articles dropped from them
• Impact (the property being hit by vehicles, animals, or falling trees or branches)
• Theft or attempted theft
• Malicious damage
• Water leaking from water tanks, apparatus or pipes or fixed heating installations
• Storm or flood
• Oil leaking from domestic heating installation at your home
• Subsidence

Accidental Damage Insurance

Accidental damage cover is an addition to a standard policy. This means you would be covered for all the perils mentioned above, plus damage caused by accidents. Accidental damage insurance can be applied to either the buildings, contents or both should you choose to do so – it solely depends on what you would want to be insured for. 

An example of accidental damage to the buildings would be if you were to put your foot through the ceiling whilst in the loft. Likewise, an example of accidental damage to contents could be spilling red wine on a white carpet.

It is important to understand that home insurance does not include cover for damage caused by wear and tear. This means that any gradual operating decline, faulty design or faulty materials would not be covered. However, they may be covered under the product's warranty instead. 

An example of something caused by wear and tear, which would not be covered by either home insurance or accidental damage cover, is if a dishwasher broke down due to its age.

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Buildings Insurance explained 

The buildings will be defined as the main structure of your home and include the following, if they form part of your home and are your responsibility:

• Domestic outbuildings
• Garages on nearby sites
• Landlords fixtures and fittings in or on the buildings
• Swimming pools
• Tennis hard courts
• Terraces, drives and footpaths
• Boundary and Garden walls, gates, fences and hedges.
• Laminated, wooden effect or vinyl floor coverings that could not reasonably be removed and re-used
• Fixed glass
• Fitted kitchens and bathroom suites

When you get a quote for home insurance, it is important to know exactly what your property's' walls and roof are made of. Insurance companies will calculate the policy price based on the materials used to construct the property.

Walls

In general, most houses in the UK are comprised of brick or stone walls. Both of which are usually considered as standard construction. Other materials used are:

• Bungaroosh
• Cob
• Corrugated Iron
• Metal
• Pre-fabricated
• Stone
• Wattle & Daub
• Wood

Roofs

Most property roofs in the UK are constructed of either slate or tiles. Both of which are usually considered as standard construction. Other materials used are:

• Asbestos
• Asphalt
• Concrete
• Felt
• Fibreglass
• Lead
• Shingle
• Thatch

Its important to note that some properties have flat roof areas. You will need to establish the total percentage of flat roof on the property e.g. up to 20%, as the insurer will factor this when pricing the policy.

Contents Insurance Explained

When looking to obtain contents insurance, you must first be aware of what exactly the term ‘contents’ applies to. Your contents will be defined as household goods and personal belongings which you own or are responsible for, such as electrical equipment, furniture and clothes. However, contents can also include:

• Fixtures and fittings other than a Landlord's fixtures and fittings
• Television, satellite and radio receiving aerials, aerial fittings and masts fixed to your home
• Gas and electric cookers and meters
• Valuables
• Office equipment
• Carpets
• Contents of the garden

If you choose to have contents insurance cover, it will automatically set to be covered inside the home. This is unless you specifically ask for cover outside the home for items you might take out and about, for example; electronic devices such as your smartphone, jewellery and bikes. 

If you need cover outside the home or have items that never leave the house but are of high value you will need to inform your insurance company. These items can be broken down into two sections; specified and unspecified personal possessions.


Specified Possessions

Specified personal belongings are items of high value that you would want to insure inside and/or outside the home. Due to policy limitations, items over certain values need to be specifically noted. You would need to ask the insurer what their single article limit (SAL) is, which is the maximum amount they would pay out for each item in the event of a claim, unless the item is specified. If you have items over this amount then you would need to specifically list them on your policy and state whether you want these covered inside the home only or outside as well. These items can include:

• Clothing • Jewellery • Watches • Furs • Musical equipment • Photographic equipment • Laptops • Money and Credit Cards • Pedal Cycles • Camping equipment

Unspecified Possessions

Unspecified possessions are personal items that you would normally wear or carry on your person when you are outside of the home. These items are generally the same as mentioned above, the difference being, they are not over the single article limit set by the insurers to be specifically noted. This is mostly used for phones, laptops, jewellery etc. For example, if you wanted to be covered for a £500 phone and £500 watch when outside the home, you would request £1,000 unspecified possession cover.

Excesses

Excesses are applied to a policy for a variety of reasons, however it is easier to understand that excesses are either compulsory or voluntary. 
Under a household policy there are usually standard excesses on both the buildings and contents which are set by the insurer. When you make a claim, you will have to pay the first part of it yourself (your excess) then your insurer will pay the rest. Therefore some people choose to have a higher excess to decrease their premium.

Home insurance does have differing excesses for certain events that can cost more to rectify. Escape of water and subsidence are the most common perils. Due to the nature of escape of water and subsidence claims and the fact that the pay-out is usually substantial, this incurs a higher excess. With most insurers the escape of water excess is between £250-£500 and subsidence excess is £1,000. 

Home Insurance Endorsements & Clauses

Sometimes it is necessary for an insurer to apply a certain clause or endorsement to the insurance which relates specifically to the policyholder's insurance. This can be for a variety of reasons and will usually show on your insurance schedule. Some examples of these are:

  • Insurers may increase the excess for a certain peril. This is usually if there has been a previous claim for the peril or if the property is in a high-risk area for a peril (such as theft or malicious damage).
  • If the policy holder has a high value item listed within or away from the home, the insurer may apply an endorsement requiring proof of value if anything was to happen to said valuable. 

Optional Extras

Key Cover

Our Key Cover provides you with up to £1,500 of cover for locksmith charges and replacement locks. If your keys were to be lost or stolen, this will also cover the cost for a new set, including any expensive car keys or immobilisers. You can rest assured knowing that the key cover comes with a 24-hour helpline, 365 days of the year, so you won’t be locked out in the rain.

Home emergency assistance

They say to expect the unexpected and with our 24-hour home emergency assistance, you can do just that. Whatever the weather, we will come out to you for a variety of home related emergencies. It covers for up to £1,000 over the year for failure of your main utilities such as gas, electric and water.

Legal Protection

We can provide you with Legal Protection to help recover losses should a non-fault accident with an un-insured driver occur. You can take advantage of up to £100,000 worth of legal expenses, covering solicitors and court fees. This also includes Personal Injury and Loss of Earnings cover if unable to work after an accident. In the worst-case scenario, cover is available for fees incurred should prosecution be brought against you in connection with any lawful use of the insured vehicle.

Excess Protection

Unfortunately, claims are sometimes necessary to make and you will usually have to pay out an excess when a claim occurs. However, once the claim has been settled, Excess Protection will refund you the money you have paid out, so you’ll never be out of pocket. You can choose whether you’d rather be covered for up to £150, £300, £500 or £1,000 over the year – the choice is yours. Having this can potentially reduce your insurance price, as you’ll be able to select a higher-level excess to reduce the overall cost.

Still confused about Home Insurance?

To find out more, please give us a call on 0333 414 1872 and we’d be more than happy to provide you with a Home Insurance quote and answer any questions. Or alternatively, fill in our call back form below and one of our specialist advisers will call you back.

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