HOME INSURANCE
Buildings insurance
This is often a condition of the lender giving you a mortgage so, in the event of a disaster, it can be repaired or rebuilt. If you don’t have buildings Insurance and your house burns down, the lender will have no collateral for its loan, so will call it in.
In which case, not only will you be homeless, but you’ll still owe the lender the value of the mortgage. Because so many lenders have suffered this, they now insist you provide proof the property is insured.
The lender will ask you to cover the property for the rebuild cost, which should be noted in the survey. In most areas of the country this will be considerably less than the market value of the property. Most insurers cover you for the rebuild cost, although some will cover you for the market value. Check which one your policy will pay out on.
What it covers
As a matter of course, most buildings insurance policies cover the fabric of the building, including built-in kitchen units and bathroom suites, outbuildings, including sheds and garages, and any walls, gates or fences.
These tend to be covered against damage or destruction caused by fire, storms, theft, vandalism, escaped water, flooding and subsidence.
Accidental damages
Some also offer accidental damage as standard, but in most cases you will have to pay extra for this cover.
This is the element that covers damage caused by, for example, drilling through a pipe. So if you plan to do any DIY on the property, it's well worth considering.
The cost of adding on this type of cover will vary, as will the cost of the basic policy, as insurers base their premium calculations on a number of factors.
How much it costs
The main factors are the age of the property, postcode, age of policyholder, number of bedrooms and type of property. Generally, the cheapest type of property to insure is a semi-detached house.
When you sign up for a mortgage the lender will ask you if you want to sign up for its buildings and contents cover. This is unlikely to be the cheapest cover.
Contents insurance
This cover is optional but it's not a good idea to skimp. In the 12 months before September 2002 there were 982,000 burglaries in England and Wales, and there are many other ways you can lose your possessions.
Contents insurance covers the things that aren't part of the fabric of your home, such as furniture, electrical equipment and clothes. It also covers curtains, carpets and things in your garden, and most polices also cover the contents of your freezer.
As with buildings insurance, most policies pay out in the event of a burglary, vandalism, fire, storm and flood, and premiums are calculated according to the type of property you own and its location.
However, contents insurance is perhaps more complicated to buy than buildings cover because of the large number of items most people have in their homes and the wide range of scenarios covered by insurers.
Accidental damages
Accidental damage cover is available on contents insurance policies. This will protect you against things like paint spillage and damage caused by pets, so it's a good idea to take it if you plan to redecorate or have a cat that loves to scratch furniture.
Adding this cover usually costs extra, although some insurers include some level of cover as a matter of course.
Why you need a Homeowner Insurance?
The largest single investment most consumers make is in their home. The consumer can protect his or her home, possessions, and liability with a homeowner’s insurance policy.
In addition to its availability to homeowners, similar coverage is available to those who rent homes or apartments. These policies are referred to as tenants’ or renters’ homeowner’s policies. If you are a renter, you do not need protection against damage to the building itself, but you do need protection against damage to or theft of your personal property and liability in the event someone falls or gets hurt on the part of the premises you rent.
A condominium owner may purchase a condominium homeowner’s policy to insure personal property. Some policies may also include any additions or alterations not insured by the condominium association. It is important to check with your condominium association and your agent before buying a policy to make sure you are adequately covered.
This is often a condition of the lender giving you a mortgage so, in the event of a disaster, it can be repaired or rebuilt. If you don’t have buildings Insurance and your house burns down, the lender will have no collateral for its loan, so will call it in.
In which case, not only will you be homeless, but you’ll still owe the lender the value of the mortgage. Because so many lenders have suffered this, they now insist you provide proof the property is insured.
The lender will ask you to cover the property for the rebuild cost, which should be noted in the survey. In most areas of the country this will be considerably less than the market value of the property. Most insurers cover you for the rebuild cost, although some will cover you for the market value. Check which one your policy will pay out on.
What it covers
As a matter of course, most buildings insurance policies cover the fabric of the building, including built-in kitchen units and bathroom suites, outbuildings, including sheds and garages, and any walls, gates or fences.
These tend to be covered against damage or destruction caused by fire, storms, theft, vandalism, escaped water, flooding and subsidence.
Accidental damages
Some also offer accidental damage as standard, but in most cases you will have to pay extra for this cover.
This is the element that covers damage caused by, for example, drilling through a pipe. So if you plan to do any DIY on the property, it's well worth considering.
The cost of adding on this type of cover will vary, as will the cost of the basic policy, as insurers base their premium calculations on a number of factors.
How much it costs
The main factors are the age of the property, postcode, age of policyholder, number of bedrooms and type of property. Generally, the cheapest type of property to insure is a semi-detached house.
When you sign up for a mortgage the lender will ask you if you want to sign up for its buildings and contents cover. This is unlikely to be the cheapest cover.
Contents insurance
This cover is optional but it's not a good idea to skimp. In the 12 months before September 2002 there were 982,000 burglaries in England and Wales, and there are many other ways you can lose your possessions.
Contents insurance covers the things that aren't part of the fabric of your home, such as furniture, electrical equipment and clothes. It also covers curtains, carpets and things in your garden, and most polices also cover the contents of your freezer.
As with buildings insurance, most policies pay out in the event of a burglary, vandalism, fire, storm and flood, and premiums are calculated according to the type of property you own and its location.
However, contents insurance is perhaps more complicated to buy than buildings cover because of the large number of items most people have in their homes and the wide range of scenarios covered by insurers.
Accidental damages
Accidental damage cover is available on contents insurance policies. This will protect you against things like paint spillage and damage caused by pets, so it's a good idea to take it if you plan to redecorate or have a cat that loves to scratch furniture.
Adding this cover usually costs extra, although some insurers include some level of cover as a matter of course.
HOMEOWNERS INSURANCE
Homeowners is one of the most popular forms of personal insurance on the market. The typical homeowners policy has two main sections: Section I covers your property, and Section II provides personal liability coverage (to cover you in case of lawsuits arising from things that happen on your property). Almost anyone who owns or leases property should have this type of insurance. Often, homeowners insurance is required by lenders as a requirement to obtain a mortgage.Why you need a Homeowner Insurance?
The largest single investment most consumers make is in their home. The consumer can protect his or her home, possessions, and liability with a homeowner’s insurance policy.
In addition to its availability to homeowners, similar coverage is available to those who rent homes or apartments. These policies are referred to as tenants’ or renters’ homeowner’s policies. If you are a renter, you do not need protection against damage to the building itself, but you do need protection against damage to or theft of your personal property and liability in the event someone falls or gets hurt on the part of the premises you rent.
A condominium owner may purchase a condominium homeowner’s policy to insure personal property. Some policies may also include any additions or alterations not insured by the condominium association. It is important to check with your condominium association and your agent before buying a policy to make sure you are adequately covered.
