It is so important to take out insurance for your home and contents – otherwise some unforeseen accident or malfunction could see you lumbered with a huge financial burden.
You have to be aware at the outset that house insurance covers two very different kinds of insurance. The first is buildings insurance, which covers all the permanent fittings, and then there is contents insurance, which covers loss or damage to all those things in your home which are not part on the structure of the building.
Right then, perhaps if we give you some examples it will help: clothing, electrical goods, jewellery and furniture all come under the heading of ‘contents’ and while policies may vary, this type of insurance will also cover you against theft, fire and flood.
What about accidental damage? That is a question often posed, and in most cases it will not be covered by your policy, so you will need to treat it as an optional extra. The same applies to personal possessions cover relating to items that you occasionally take out of the house, such as cameras, laptops and briefcases; and also if you want cover for items that you might lose or damage if you go abroad on holiday.
It will pay you to familiarise yourself with the things that are not covered, which, more often than not, will include normal wear and tear, and anything to do with the structure of your home – such as walls and roof. The latter will come under your buildings insurance policy.
While your mortgage provider will not insist on your having contents insurance it is advisable. Just think about it. It has been estimated that the average home has contents worth in the region of £45,000. An average contents insurance will cost you about £110 a year. Don’t you think it makes sense?