Things to consider when buying home insurance

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.