Things to Consider When Buying Your Home Insurance

Price isn't the only factor to consider when buying home insurance. There are many areas where specific levels of cover might be important to you.

Whether you're moving home or simply want to renew your policy, there's a lot to consider when it comes to protecting your home and possessions.

How Important Are Lower Premiums to You?

This touches on another crucial question you have to ask yourself when deciding on the excess. How important is it to you to save each month?

Some people are on very tight budgets and even a few pounds saved every month is important.

Others might feel that they’re extremely careful and risk-averse. They may pay a great deal of attention to looking after their properties and maintain a high level of vigilance at all times when it comes to security and looking after possessions.

If you’re one such person, you might have good reason for choosing a higher level of excess. However, you still have to ask yourself if you could afford the excess in the event of claiming.

What Does Home Insurance Cover Me For?

Insured Events

All policies will offer you cover if your property is damaged or lost due to one of a list of unfortunate events. Most policies will cover you for:

  • fire and explosion
  • flood (sometimes optional)
  • storm and rainwater
  • lightning
  • accidental breakage of glass, ceramics, etc.
  • earthquake and tsunami
  • theft and attempted theft
  • vandalism and malicious damage
  • impact damage (e.g. falling trees)
  • sudden escape of liquid (e.g. burst pipes)

How Does Home Insurance Work?

Homeowners insurance is a multi-line policy, meaning that the premiums, or regularly scheduled payments made to the insurer, cover both property and liability insurance. The premium is usually determined by the replacement cost of the home and its contents.

There are three major reasons to buy home insurance:

  • To provide property coverage: Homeowners insurance covers the physical structure of your home and your personal property if it gets damaged or destroyed.
  • To provide liability coverage: If someone who isn’t covered under your policy is injured or killed, or their property is damaged or destroyed while they’re on your property, your homeowners policy will cover your personal legal responsibility. This coverage extends to cases where damage or injury happens adjacent to your property, such as when the limb of a tree on your property falls on a parked car on the street.
  • To satisfy your mortgage lender: To get a mortgage from a bank, most lenders insist you have insurance as long as you have a mortgage; you also have to list the lender as the mortgage lender on the policy.