You’ve secured the mortgage, paid the fees, and you have chosen your dream first home, but the work isn’t over once you move in. After the challenging experience of first time buying, insurance can often take a back seat. Here’s some helpful guidance on choosing home insurance and how it will protect your new investment.
What is home insurance?
Home insurance is often split into two parts – building and contents insurance. Put simply, building cover insures damage to your physical property (the bricks
and mortar) from unfortunate and unforeseen events such as fire, flooding and weather damage. In places which have high risk of weather damage, such as flooding, your choice of insurance providers may be limited and premiums may be more expensive.
Contents insurance covers all of your belongings, from your laptop to your fridge, and protects them from potential theft, loss or damage.
Do I have to have it?
While you pay off your mortgage your home is technically still “borrowed” from your mortgage lender, therefore they will most probably require you to take out building insurance to protect their investment. However, you don’t need to use your mortgage lender to obtain your insurance. Shop around to compare coverage, there are plenty of price comparison sites such as Confused.com that can help guide you.
How much is my home worth?
It’s highly important to get the right type of cover for your home, so giving your insurance company truthful and accurate answers, when they ask you questions, is essential. Your insurance company will most likely ask you the rebuild cost of your home, which means how much it would cost in total to build your home from scratch again. Many people get a surveyor to help calculate this amount; however you can get an accurate estimate by using the Buildings Cost Information Service’s free online calculator.
Contents insurance is slightly easier; you just need to estimate the worth of all of your valuable property. Money Supermarket has a great online calculator to help you calculate the value of your property.
Do I need to update my insurance?
Planning on a fancy extension? Or dreaming of a spectacular loft conversion? You’ll need to have a chat with your insurer as any changes to your home may affect the rebuild cost. If you don’t change your policy to match any changes and you become underinsured, you may be left to pay the extra if anything was to happen to your home.
Are you a recent first time buyer and have any helpful advice on home insurance? Pop your tips in the comments below.
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