Home insurance - considerations before and after you buy
Before deciding on a home insurance policy, you should be sure that you know exactly what you're
buying. You should be aware of what is and what isn't covered by the policy as the last thing you
need is to find out you're not covered for something that is important to you if you need to make
a claim. You need to check your cover by reading through the terms and conditions and any
exclusions. Once you’ve bought a policy, don't simply forget about it - you will need to inform
your insurer of changes to your circumstances in order to keep it valid.
Before you buy:
Is insurance really necessary?
Although buildings and contents insurance is not a legal requirement, it's extremely wise to have
it, and your mortgage company will usually insist you have buildings insurance before they lend
you the money to buy your home. If you rent a property you may also find the rental company will
insist on seeing evidence of contents insurance before you can sign a lease.
Of course you have to consider the financial implications of not having insurance should something
happen to your property. How many of us can afford to rebuild our houses or replace the contents
of them should something disastrous happen?
Do I have to take out buildings insurance with my mortgage lender?
While you are not legally required to have buildings insurance it is usual that if you take out
a mortgage, the mortgage lender will insist you have this cover in place and may ask for proof
of cover. After all, they are usually lending you a large amount of money and will want to make
sure it can be paid back if your home is destroyed or damaged. For this reason, most people are
sold building insurance when they take out a mortgage.
Research shows that people often believe that it is a condition of their mortgage that they take
the insurance offered to them by their lender. In most cases, this isn't true, meaning you're
free to make your own insurance arrangements. That's why it’s a good idea to compare cover and
prices with gocompare.com, there could be substantial savings to be made!
After you buy:
Why do I need to tell my insurance company about any changes in my circumstances?
Your insurance company relies on you to provide the relevant information to them about your property and
your personal circumstances when you buy your insurance policy. This is known as 'utmost good faith' and
means you must tell them everything relevant whether they ask you or not, so they can decide whether or
not to insure you and how much to charge for your insurance.
You also need to keep your insurance company informed of any changes to your circumstances during the term
of your policy, such as making any improvements to your property. This may affect the price your insurance
company will charge you when your renewal is due, so don't forget to shop around to make sure you are still
getting the best deal for your insurance, with both the price and cover on offer.
What should I do if I need to have emergency repairs done?
If at some point during your home insurance policy your property is damaged, make sure you take reasonable
steps to stop the damage from getting any worse. Many policies cover the cost of temporary work and provide
emergency helplines which will put you in touch with competent tradesmen who can carry out the emergency
repair work. Speak to your insurance company straight away if anything happens as they may insist on you
using tradesmen approved by them to do repairs, and to agree what action needs to be taken.
What happens if I have to make a claim?
If you find yourself having to make a claim on your policy, here are some helpful tips that will help
make the process easier for you:
- Check that your policy is still in force, and that you are covered for the claim. Contact your insurance company and check the terms and conditions of your policy to see what is covered
- Take reasonable steps to minimise any further loss or damage. Contact your home insurance company to see if they can put you in touch with reputable repairers and to make sure they’re happy with the steps you want to take to repair your property
- If you have lost property or if a crime has been committed, report this immediately to the police so you can get a crime reference number which your insurance company will want for their records. They may refuse to pay out in these circumstances without this number
- Contact your insurance company as soon as possible and ask for a claim form to be sent to you. Be sure to complete the claim form accurately and always keep a copy for your own records
- Should you suffer a substantial claim, you may want to employ loss assessors to help you with your claim. While the choice of whom you appoint is entirely up to you we would recommend that you look at the
Chartered Institute of Loss Adjusters† website.
The Institute of Public Loss Assessors was founded 35 years ago, and is the recognised professional body representing Loss Assessors in the UK. Be sure to get details of all fees and services offered, in writing, before any work is carried out
- Keep receipts for any costs incurred as a result of loss or damage. You may be able to claim these back as part of your policy cover
- Finally, stay in contact with your insurance company during the claim; they will be able to keep you updated with any progress
Will I get a discount on my insurance if I don't make a claim?
More often than not, insurance companies will discount your home insurance if you don't make a claim on
your policy, though the amount of discount offered differs from insurance company to insurance company.
Insurance companies tend to use a centralised claims register and so can easily check on the number of
claim free years that are claimed by any policyholder.
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