Home Insurance - Building & Contents

There are two types of home insurance: buildings insurance and contents insurance. You can buy a single policy that covers both, but it may be better to view them as separate policies because the cheapest insurer for the bricks and mortar might not be the cheapest for the contents.

Buildings insurance
If you have a mortgage, it will be a condition that you have adequate buildings insurance to cover the full rebuilding costs for the term of the loan. Failure to maintain cover in force will mean that you are in breach of your mortgage agreement. The risk is that, if cover is not in place or is inadequate, you could find your home destroyed by fire, leaving you with nowhere to live but still owing the lender money!!

If you do not have appropriate cover, the lender may revoke the loan or, more likely, take out cover in its own right and add the costs to your mortgage account - then, you will not only be paying a significantly higher premium than you could obtain elsewhere, but you will be charged interest on top!

Buildings insurance policies cover the building, including built-in kitchen units and bathroom suites, outbuildings, including sheds and garages plus walls, gates or fences.

Standard cover provides protection against damage or destruction caused by fire, storms, theft, vandalism, escaped water, flooding and subsidence.

Some policies offer accidental damage in return for a small additional premium. This would cover damage caused by, for example, drilling through a pipe.

The main factors in determining the premium are the age of the property, postcode, age of policyholder, number of bedrooms and type of property.

Do not automatically accept the mortgage lender’s insurance – it is unlikely to be the cheapest cover – always shop around, but make sure you look at the small print to ensure the cover meets your needs.

Contents insurance
Cover is optional but with the replacement cost of household contents running into tens of thousands of pounds, it is only prudent to protect yourself against loss or damage. Look at the official statistics:
• Every 37 seconds a home somewhere in Britain is burgled
• Every year there are over 1 million burglaries and attempted burglaries
• 20% of households experience more than one incident a year. 13% are burgled twice and 7% three or more times
• The fire service attend around 60,000 house fires per year
Contents insurance covers items such as furniture, carpets, curtains, electrical equipment and clothes. Most policies cover losses from burglary, vandalism, fire, storm and flood; premiums are based on the type of property you own and your postcode.

Accidental damage cover is also available for an additional premium on contents insurance policies – to reimburse you against accidents like paint spillage and damage caused by pets.

Some insurers automatically cover home office equipment (up to around £5,000) for people that work from home. If your employment involves specialist equipment, or you employ other people, you will need to make special arrangements for cover.

Valuables
If you have valuable items either in your home or that you take outside with you, you may need to add extra cover, or consider a separate policy, as most policies cover valuable individual items only up to a specified limited.

Security
Any security measures you add to your home could help reduce the cost of your insurance, for example, a burglar alarm or appropriate door and window locks.

Your Mortgage Options LLP is authorised and regulated by the Financial Services Authority for regulated mortgage contracts and non-investment insurance contracts.

We offer products from a range of insurers for home insurance, term assurance and critical illness protection. We only offer products from a limited number of insurers for mortgage payment protection insurance. Ask us for a list of the companies and products we offer.

We will advise and make a recommendation for you for life and critical illness insurance after we have assessed your needs. You will not receive advice or a recommendation from us for home insurance or mortgage payment protection. We may ask some questions to narrow down the selection of products that we will provide details on. You will then need to make your own choice about how to proceed.

We do not charge a fee for any non-investment insurance contracts. You will receive a quotation which will tell you about any other fees relating to any particular insurance policy.