Take Care Of The Nuts And Bolts Of Your Home Insurance

A large number of home owners, or even those who are renting a property, are liable to become confused between ensuring the property and its contents. These are two separate entities and, in order to prevent any misunderstanding which can prove to be expensive, it is worth taking the time to check out all the ins and outs of insuring a home and its contents.

It goes without saying that the larger part of the package is ensuring the property. The first thing that a home owner needs to be careful of is that they do not double insure the property. In many cases, if they have taken out a mortgage on the property, the mortgage bank will insist that the percentage of the value of the property they are lending money on is insured. It is in the interests of the mortgage bank to handle this insurance on their own as part of the monthly payment.

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However, the insurance rates will be very high, and easily beaten. That’s why, even if you have to argue, you’re better taking your property insurance business elsewhere. The other factor that needs to be taken into account is that the mortgage bank will only cover the percentage of the property that they are lending on. It is down to the homeowner to make sure that the total value of the property is covered.

Assessing The Value of Your Home

Where you have to be careful with certain insurance companies when assessing the value of the property is that you only take into account the rebuild cost and not the land that it sits on. In the event that the property is totally destroyed by fire, then the insurance company will pay out. If the land on which the property is built is destroyed in an earthquake or some other massive calamity, then that is described as an act of God, and the insurance company, in any event, will be very reluctant to pay out.

Other aspects of property insurance are to keep an eye on the value of the property, which, should always be on the rise, although at different rates. It may be worth your while to have an independent insurance assessment made on the property, every couple of years. Although by doing so you may pump up the cost of your premium, it will be well worth your while, if a cataclysmic event befalls you.

Home Contents

Once the property insurance has been taking care of the next step is to worry about home contents insurance.  In relation to the value of the property, home contents insurance will appear minor. However, the chances are that the contents of a family home are liable to be damaged or stolen, than the property itself. Therefore the issue of home contents insurance should never be taken lightly. There have been a fairly large number of cases in the UK in the last few years of families failing to insure their contents, either because they don’t have the budget, or in a few cases, they mistakenly believe that the landlord was responsible for insuring their contents.

For those who are considering even for a second that insuring their personal property is not worthwhile, then they should think again. What they should never forget that their personal possessions can be valued anywhere between £20,000-£40,000, and most of it will have some form of personal sentimental value.

With the grey areas can begin with insurance companies is on the replacement value of someone’s personal effects. For example, if a refrigerator suddenly bursts into flames and is rated by the insurance assessor as a total loss, then the insurance company would do their very best to pay out only according to the current value of the refrigerator, and not the cost of replacing it. There may be some basis to that claim if the piece of equipment is very old and has been in use for years. With a little digging in off the heels, you will usually find that a compromise will be reached and a new refrigerator will be on its way.

Other issues that have to be dealt with when it comes to personal property insurance can run as follows:

  • Accident insurance
  • Insuring items of value, such as jewelry
  • Frost damage

These are just some of the sub-sections that should appear on a domestic insurance policy. That’s why it’s worth checking all the fine print, when asking for your insurance quote.

Guest post by Hugo at Your Insurance Quote. You can read more posts and guides about personal finance topics on his Blog.

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