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How Much Home Insurance Do You Need?

By: Mark Bartley

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Whether you're lucky enough to own your own home or are in rented accommodation, house insurance is an important layer of protection for both your home and your valuable possessions. With so many home insurance policies to choose from, how do you decide which deal is right for you, and what should you take into consideration when choosing the perfect package?

Part of the package
Mortgage lenders will usually insist that you have arranged a suitable buildings insurance policy before they will approve a mortgage. They may even offer you a deal on your home insurance when you arrange your mortgage. While it may be convenient to get 'everything done in one go', it could mean that you are missing out on a better deal with another provider. When you're planning your home insurance, it's a good idea to check on price comparison sites or shop around and get at least three quotes, as prices and coverage can vary considerably between providers. Most building insurance policies will protect you against fire, flood, subsidence, falling trees, storm damage or even impact from vehicles, but before you buy, consider your property's location and whether your home insurance cover will protect you against the most likely of these. This is particularly relevant if you live near a large river or are in a 'flood risk' area. Your insurer may not cover you for flood damage if your property has suffered damage through flooding before, so check carefully before you decide.

With almost every insurance policy, you will need to specify the amount of excess you are willing to pay. The excess is the amount you are willing to pay towards any repairs or to replace items if you have to make a claim. Generally, the higher the excess you are willing to pay, the cheaper your policy will be. However, don't pick the highest excess just to keep your monthly premiums down – remember that it's not just how much the policy costs, but what kind of cover it provides that's important. You can always add 'bolt-on' extras to an existing policy if you feel that there is an area that may not be covered by your original policy.

Contents and building – two very different policies
Contents insurance is now often packaged with your house insurance. While your house insurance protects the bricks and mortar, your contents insurance protects your possessions, both inside and outside the house. While buildings insurance is mandatory if you're taking out a mortgage, contents insurance isn't. However, it would be sensible to take out contents insurance as well, because your possessions can add up to a considerable amount of money should you need to replace them in the event of a flood or fire damage, for example. If you have a lot of high-end tech such as computers, hi-fi systems or expensive TVs, then contents insurance will protect them if they are damaged and have to be replaced.

Choosing the right home insurance policy can be a bit of a juggling act. You need to make sure that you are not under-insured, so making an inventory of your possessions, particularly expensive items will give you a better idea of how much you need to take out. That way, you will have the peace of mind that, should the worst happen, you will be able to replace your possessions without having to dig too deeply into your savings. Some policies offer a new-for-old replacement service for lost or damaged items. The insurer will replace any item with a brand new one. Although this may push your premiums up a little, it is worth it if you have expensive items that have to be replaced.

Home insurance policies have a habit of languishing in a cupboard for years. It can be easy to forget about your policy and just keep on paying the premiums every year without checking to see if you could get a better deal elsewhere. But just like any other financial service, it is possible to shop around using comparison sites or speaking to other providers to see if you could get a better deal, especially if you haven't reassessed your policy for some time and have bought new items or made changes to your home in the meantime. Perhaps 2010 is the year when you should be thinking about taking a fresh look at your home insurance provision.

Article Source: http://depositarticles.com/

This is one of several articles by Mark Bartleythat can help help enhance your understanding and knowledge of the home insurance sector. Look out for more information from Mark on home insurance in future articles.

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