Recent flooding in parts of the country has highlighted the need for home owners to take out home insurance.
The flooding caused by record rainfall during the weekend of the 5th December has caused devastation in Cumbria, and home owners and businesses have been left with extensive damages. It also unfortunately appears that many are uninsured despite living in a flood risk area. Either residents believed they would not need insurance, or their plan did not cover flood damage - which is why you should thoroughly check your plan before you take it out.
Insure your home
Many dismiss the idea of taking out a home insurance due to other cost priorities, however home insurance can be very worthwhile to have – particularly when living in high risk areas such as Cumbria. A lot of people tend to focus on the cost rather than the benefits, but the reality is that the likelihood of damage to the interior or exterior of your house at some point is high. Occasionally the cost of the damage can be so high that the home owner struggles to pay for repairs themselves.
The Types of Home Insurance
There are two different types of home insurance – buildings insurance and contents insurance. Buildings insurance covers permanent fixtures and fittings, while contents insurance covers your belongings. If you own your own home and have a mortgage on it, buildings insurance is essential and is a likely stipulation in your mortgage contract. It is also worth noting that the average British home has contents worth £45,000 and the average contents insurance costs £109 a year, which puts the price of insurance into perspective.
The Benefits of Home Insurance
The obvious benefit of a home insurance is that you won’t have to cover the full extent of the damages yourself. Financially, this is extremely beneficial should anything happen to your home. Your policy may very well cover bringing your property up to code after a covered loss as well, in the case of changed laws and regulations.
A Worthwhile Investment
Buying a home is the most important investment that most of us will make during a lifetime, and as you put time and money into your property its equity increases. Taking out home insurance ensures you won’t have to start building that equity from scratch should damage occur. In the event that your home experiences huge damage, much like the flooding in Cumbria, you could find yourself without a place to stay for a period of time. Many insurance companies will cover the cost of alternative accommodation and living expenses.
It is important to make sure your home insurance covers the actual value of your home. For buildings insurance it is the rebuild value of the property that has to be insured, which is usually lower than the market value of a property. If you remodel or redecorate it is important to check if this affects the value in any way.
Value of Contents
Be careful not to underestimate the actual value of the contents of your home. If you own high-value items such as fine jewellery or art you will most likely need to take out separate insurance on those, as the average upper value for a single item covered by contents insurance is around £1,000.
If you would like more information on choosing the right home insurance, please get in touch.