Why do I need insurance?
Your home and the contents of it are probably one of the most
valuable things you own. Home insurance exists because many of us
would not be able to afford rebuilding their house, or replacing
all lost possessions if something like a fire destroyed it all. And
not only that, if you could not live in your house would you be
able to afford paying for alternative accommodation? Home insurance
normally offers you contents and buildings insurance and additional
options.
Contents Insurance
Whether you are renting or buying a house, you will have
possessions. Possessions can range from your clothes to the
contents of your kitchen cabinets, your television and your CD
collections. Just go through all the rooms in your home and add up
the value of what you would take with you if you moved out. That
will give you a good indication of the total amount of contents you
may wish to insure.
Buildings Insurance
Buildings insurance is often mandatory if you have a mortgage.
Even if you own your house outright, it still can be beneficial to
have buildings insurance. Buildings insurance is calculated on how
much it would cost to rebuild your home. Therefore the value may
differ from how much your house would be worth if you sell it. To
assess what the rebuild value is for homes in the UK, there is the
ABI/BCIS rebuilding cost calculator If you are looking for
insurance outside the UK, for instance for your holiday home or second home insurance you may need
to check your mortgage documentation or commission a survey.
Accidental Damage
Standard buildings and contents insurance can
cover you for what are called perils, such as fire, theft, storm
and flood. But what if you knock over a glass of wine and stain
your carpet or a hot pan burns your kitchen work surface. These
kinds of accidents can be covered through accidental damage
cover.
Liability
Owning or renting a home comes with responsibilities. Most home
insurance policies include cover to protect you against certain
financial compensation you may be liable to pay.