The world of insurance can be a confusing one – not just for moms, but for everyone. With so many forms of policies, small type, and financial jargon, it can be difficult to get your head around home insurance at times. However, choosing the wrong policy for you can be a costly mistake to make.
Traditionally home insurance fits into two categories; you have building and contents insurance. Each of these has specific necessary components that make them equally as important to each other. Building insurance covers your home for damage to the structure of the building. This could be flood damage, subsidence, fire, electrical issues and will generally cover fixtures and fittings, such as your bathroom suite. Contents insurance is literally the protection of everything within your home. It can cover you against burglary and damage to personal possessions within the property and is of the uppermost importance if you own items of values. The majority of insurance companies offer these two forms under the heading of home insurance, so you don’t need to worry about taking them out separately.
The main tip when making the decision to insure your home is to do your research – compare the offers and deals that are available to you. Insurance companies run many promotions and discounts throughout the year, so by having all the knowledge you can save yourself money to spend on your new home.
Now that you have the basics of home insurance, a multitude of questions come to light that can be difficult to navigate. Here are some of the most frequently asked questions and answers to help you out:
Do I really need home insurance?
If you own a house and have a mortgage in your name, then it is extremely advisable to have your home insured for the rebuild value. This is for two reasons. Firstly, if something were to damage the structure of your home and you didn’t have insurance, you would have to pay for all the repairs. This might be ok for a smashed window, but what about if your entire house was damaged by a flood, would you be able to afford this?
Secondly, if you have a mortgage and your house is irrevocably damaged, then your mortgage provider would need you to pay the remainder of your loan back to them. Without insurance in place, this could cost you hundreds of thousands of dollars.
Contents insurance is certainly not mandatory, but again it is advised to make sure that you are never left out of pocket in any eventuality that might occur.
Do I need to add accidental cover to my policy?
Accidental cover is quite literally what the title suggests, it is fir those one off little accidents that life often throws upon us. This is any singular accident that damages your home and/or contents. Now, this is where many people get confused, accidental cover is different from your overall home insurance policy mainly that it’s coverage spans a wider list of accidental damages.
All home insurance policies will have some items that they simply don’t cover, such as furniture and clothes. Each insurance policy will differ slightly from company to company, so you will need to check your policy to see what your insurance covers. However, by adding accidental cover, you can be assured that all of your contents will be covered.
Again, like contents insurance, this is not a mandatory requirement, but it is advised for those of us with circumstances that make it more likely for accidents to occur. Many claimants are those with small children or lots of larger house pets that can knock things over or accidental smash windows. Look at your personal circumstances to see if any flags are raised.
Do I need to get building insurance through my mortgage provider?
There are some mortgage providers that make this a requirement when signing up for your home, however this is not the majority of them and it is recommended to shop around for the exact right policy for your specific circumstances. There are also vast price differences between policies, so by shopping around you can also make sure that you are paying the correct amount for a policy that closely meets your needs.