Home Insurance - A Guide For First Time Buyers
Buying your first home is an exciting time that's full of challenges. You can make sure that your new place is fully protected from calamity by taking out home insurance through local insurance brokers who will source the best and most appropriate deal for you.
But isn't home insurance just an unnecessary expense? Here's a quick guide on why home insurance is so important and why you really can't afford to be without it.
Home Insurance Basics
Home insurance is comprised of two separate types of cover:
- contents cover
- buildings cover
There's no legal requirement to have either type of cover, but without it you'll have no protection for your property or your possessions.
Contents insurance gives protection to any of your possessions that are kept inside your home including:
- kitchen equipment
- TVs, radios, computers etc
- personal items, such as jewellery and clothes
You will be covered under your contents insurance policy if any of your possessions are stolen or damaged as a result of fire, vandalism or by accident. Some of your property may also be covered when you are away from home, although what's covered will vary from policy to policy.
If you have any items of property that are of high value, you should list them individually on your policy. You may have to pay a slightly higher premium for additional high-value items.
Buildings insurance covers anything relating to the physical building including:
- the 'bricks and mortar', including your roof
- fitted kitchens
- sanitary ware
- outbuildings, including greenhouses, sheds, and garages
- underground cabling
- doors and windows
If your home is damaged or destroyed by flood, fire, subsidence, storms or malicious damage, buildings insurance has you covered. If you rent a property, arranging buildings insurance is your landlord's responsibility. If you're buying, your mortgage lender will require that you have buildings insurance in place before your purchase can be completed.
In the event that you have to make a claim on your insurance, you will be required to pay an amount of money called the 'excess'. This is a fee demanded by the insurer before they will pay out on the remainder of your claim and the amount varies among providers.
When you buy a new home or move into a rental property, it's highly recommended that you take out buildings and contents insurance as appropriate. Have a chat with your local insurance brokers for more advice and information.