The importance of property insurance

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With an uncertain economy, rising living costs and many household budgets being stretched tighter than ever, it can be tempting to cut costs wherever possible. But while forgoing another new outfit and buying cheaper brands of beans are all excellent ways of making savings, there is one area that you really can’t afford to skimp on: property insurance.

Property insurance can sometimes seem like a bit of a waste of money. Many people feel that the accidents and problems that such insurance covers ‘will never happen to me’ and as a result are unwilling to add extra expense to their budgets. However, when one considers the cost of replacing items and repairing a house should the worst happen, it might be the best payment you ever make.

A survey by supermarket giant Sainsbury’s recently found that the average British home has £45,000 worth of items in it, including electricals, furniture and fittings. While the risk of something happening to your home is unlikely, without insurance you will have to foot the bill for getting life back to normal entirely on your own, an impossible ask for many families.

Furthermore, getting insurance on your property may not be your choice to make. Many mortgage contracts or leases stipulate that the tenants or owners of a house must have some form of insurance against damage, theft or similar in place and failing to do so can result in quite a few legal problems. This is especially likely if you live in a ‘high risk’ area (near a river for example, where flooding is a possibility), or if the value of your home is particularly high.

However, once you’ve been persuaded to get property insurance, finding the right policy for you is vital in ensuring that you’re comprehensively covered. Many people assume their policy covers any damage or problem that may befall their property, but this simply isn’t true. Exclusions will often apply to certain situations and specific items may not be covered unless you add a ‘floater’ (an extra to your primary policy). Check your insurance contract very carefully before committing to it and don’t be afraid to double-check that you’re covered for x, y or z: that’s what the company is there for!

Exclusions will generally apply to items that people would not necessarily have such as expensive jewellery, artwork or collectables. If you have any of these items in your home then you will need to let your insurer know, since most policies won’t cover this as a matter of course. Exclusions may also apply to general wear and tear on the house, or minor damage caused by storms; again, check your policy carefully to see what you’re covered by.

As a rule, property insurance is divided into two main categories, building and contents insurance, and you need to ensure that you have a policy in place for both. Most insurers will offer a dual policy that may be cheaper and easier, but make sure to compare quotes to find one that is right for you.

As a rule, ‘building insurance’ refers to the unmoveable items in the property such as sinks, windows and radiators. ‘Contents insurance’ is for anything you would take with you should you move house, including furniture and personal belongings.

Whichever policy you choose, the correct insurance can guard against a hefty bill in the long-term and will make the stress of something happening to your home much easier to deal with. While damage or theft is never a nice thing to go through, knowing that you’ll have the money to put things right can be an enormous comfort and will ensure that life can get back to normal as quickly as possible. Check your property insurance policy today and protect your home.