Insure your home

14 April 2008

Victims of last year's floods paid £525 million in VAT on repairs to their homes, official figures reveal. With a third of us lacking basic household insurance, what better reason to bite the bullet and protect your wallet from flood damage?

Buildings insurance
This will cover both the structure of your property and its permanent fixtures and fittings such as baths and toilets, fitted kitchens, bedroom cupboards and interior decorations. It will also insure against events that damage your home, such as lightening or an earthquake; subsidence; storm and flood and falling trees and branches.

Contents insurance
This will cover the damage or loss of the possessions in your home that you would normally take with you if you moved. You can also include cover for accidental damage and items taken away from home, such as a camera, mp3 player or laptop, however this will increase the cost. You don’t have to buy buildings and contents from the same provider and it’s worth getting a few quotes to find the best deal.

How much cover do I need?
The sum assured is the maximum amount the insurance company will pay out in the event of a claim. The Association of British Insurers (ABI) say it is your responsibility to ensure that the sum insured meets the full cost of rebuilding your property and replacing the contents inside. Underinsurance could mean that your claim is reduced or rejected altogether.

Small print
Policies exclude certain risks and possessions and these will be explained in the policy document. It’s crucial you read and understand them to avoid being stung when you come to claim. Common exclusions include if you let your home or if it is unoccupied for more than 30 consecutive days.

Check your cover
Review your policy regularly to ensure it still meets your needs and provides adequate cover. If you’ve recently made some big purchases, such as gadgets or art work for example, you could find yourself underinsured if you haven’t informed your provider. It will usually result in an increase in your premiums, so whenever you come to renew, always shop around for the best deal.

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