Are you insured properly

Are you properly insured?

Around 6.5 million UK homes are underinsured1, according to Mumsnet, and it could spell disaster for many people if they need to make a claim. Do you have the right level of cover? Read our guide to the facts to find out…

The consequences of not having the right cover can be serious. If you need to make a claim and your cover turns out to be inadequate, you could find yourself making up the difference. Even worse, you might end up having no cover at all.

So what’s going wrong? Well, it could be a number of things. Missing valuable items off your policy, under or over-stating the cost of rebuilding your home or of replacing your contents, getting the wrong type of insurance, or even forgetting to make mid-term adjustments can all leave you footing a hefty bill if something happens. Find out how to avoid some of the most common insurance errors with our true or false list.

“I only need to give a rough estimate of my possessions”

False. The more specific you can be, the better. While time consuming, it’s a good idea to go through your home room by room and tot up the cost of replacing everything should you lose it. Don’t underestimate the value of clothes, DVDs, music and books, and don’t miss often forgotten items such as carpets, curtains and garden furniture. You’ll also need to take into account the cost of buying new, not secondhand, as most policies offer cover on a ‘new for old’ basis.

“I only need one policy”

This can be true, if you buy a combined buildings and contents insurance policy. Buildings insurance covers the physical structure of your home, as well as permanent fixtures such as kitchen units and bathroom suites. However, you’ll need a contents insurance policy to cover soft furnishings, furniture, electricals etc. Forgetting contents insurance could cost you dearly, but a combined policy could offer you a great deal on your cover.

“I don’t need insurance until I move in”

False. When buying a home, you need to have buildings insurance in place from the time you exchange contracts, not the day of completion. You only need buildings insurance if you own the property. If you rent, it is probably the landlord’s responsibility to insure the buildings, but check your lease in case it’s your responsibility. You will need your own contents insurance policy.

“My buildings insurance should cover the cost of rebuilding my house”

True. Buildings insurance should cover the cost of rebuilding the property, not the market price. The good news is this will probably lower the cost of your premiums. Use an online calculator, such as one provided by the Royal Institution of Chartered Surveyors, to work out this cost, or call in a professional. Don’t forget outbuildings and garden walls.

“I don’t need buildings insurance if I live in a flat”

False. This is only true if you live in a rented flat or if you own a leasehold flat. If you own a share of the freehold, you and the other shareholders will need to work out the cost of rebuilding the whole building together and split the cost of buildings insurance accordingly.

“If I lose my wedding ring on the beach, I’m covered by my contents insurance”

False. If you want items such as cameras, laptops, jewellery and bikes to be insured when you’re out and about, you’ll need to take out additional personal possessions cover. If an item is worth more than a certain value (say around £1,000 or £1,500) it will need to be listed as a specified item.

“If I spill red wine on the carpet, I’m covered by my contents insurance”

False. Accidental damage is usually an optional add-on. This covers you if you have a home accident, such as spilling red wine on a carpet, knocking over your TV or having a DIY disaster.

“It’s a good idea to opt for a high excess”

False. According to ABI, insurers paid out £12.9 million per day in property claims for 2015, and the average payout per claim was £2882. So it’s best not to assume that you’ll never need to use your insurance policy and opt for a higher excess to bring premiums down. Only opt for an excess that you can afford should you need to make a claim.

“I need to tell my insurer if something changes”

True. If you get a new, expensive piece of jewellery, or an antique goes up in value or you build an extension, you’ll need to inform your insurer, as your premiums could change. If you don’t update your policy you may not be covered.

Is there something you think you might have overlooked? If our article has raised some questions, do please give us a call on 01438 761 670 and a member of our Customer Services Team will be able to talk you through your policy. Don’t forget that we offer a Signature Home Insurance policy, covering home emergencies and accidental damage, and you can make adjustments to your existing policy for free!