Following our piece on speeding up an insurance claim, this guest post from Insurance Claim Solutions focuses on choosing the right policy. To ensure you never face a shortfall after theft, loss or damage, it’s important to get your home and contents insurance right. Having the right cover for the right value is the surest way to an adequate pay-out should it come to it.
Getting the right cover
The first thing is to make sure you get the right policy for your needs. Most home insurance policies are broadly similar, but be careful when reading through the policy, you may find your property doesn’t meet all the requirements, or that extra cover will be needed.
In particular, you’ll need to make sure your security meets the minimum requirements specified by the policy. Not only will this help guard against burglary, but not meeting these requirements will invalidate your cover against break-ins, making your monthly premium a waste of money.
How old your property is, whether it’s a listed building and if it’s located in a flood risk area, or particularly close to the sea, also all factor in to whether or not your property will be covered by a standard policy.
If you work from home, ask how this affects your insurance. Depending on your circumstances you may need to add extras for business equipment, and if you have clients over, you’ll need public liability insurance. This could also invalidate a standard home insurance policy.
Accurately assessing value
Once you’re sure the policy will definitely cover you, you need to make sure it covers you for the right amount. There’s no sense in having insurance that won’t help you recover should the worst happen.
If you own, be aware that the property value used in your buildings insurance is the re-build value, i.e. the cost of re-building the house, rather than the market value. This is often significantly lower, so don’t fall into the trap of paying more for your buildings insurance than you have to.
Contents insurance usually comes as either bedroom-rated (an industry standard estimate of the value of contents based on number of bedrooms), unlimited sum insured, or sum insured (based on a figure provided by you for what the contents are worth).
Don’t be tempted to under-insure. Your policy will be cheaper, but it won’t pay out enough should the time comes. It’s important to be accurate.
If taking out an unlimited sum insured policy, you needn’t worry. But if you’re on sum insured or bedroom-rated you should accurately assess the value of your possessions. Go through every room noting down all of its contents and the value of each item – include curtains, carpets; anything not structurally part of the building. Some insurers have online calculators to help you do this.
It’s useful to take photos of everything, this could be valuable evidence should a dispute arise in the future.
Most contents policies have a valuables allowance for any single item, anywhere between up to £1,500 and £15,000. Be sure to inform your insurer of any items that fall into this category (e.g. engagement ring) and if you have anything more valuable than the limit, be prepared to pay extra.
Insurance loss adjusters will notoriously attempt to minimise the pay-out from any claim. Although you can hire an independent loss assessor to help you get what you deserve, they can only do so within what you’re actually covered for.
Finally, be careful about whether your policy is ‘new for old’ or indemnity. The former means any item will be replaced by a new equivalent, the latter means it will be replaced for its current value (i.e. its second hand value). Again, an indemnity policy may be cheaper, but new for old is more useful.