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Important Considerations Before Taking Out A Home Insurance Policy

Posted 27 May 2021 by Keith Osborne

Home insurance is a necessity but it’s important not to go for the first policy you see – there are a number of points to consider...

Insurance is a necessity. Even though you could go your whole life without needing it, having that safety net there is still a huge weight off your shoulders. After all, it’s better to pay for cover you might not need than to be stuck footing the bill for serious damage or theft.

Of course, it’s important not to go for the first insurance policy you see, especially when it comes to home cover. You want to explore what’s around and look at what you get for your money.

In particular, these are the important things to look out for.

What is the excess?

Insurance companies don’t pay for everything themselves. When you go through the process of making an insurance claim, you have to pay a portion of the bill yourself. This figure reflects whatever your excess is, which is something the insurance provider establishes before you take out a policy. The lower the excess, the less you have to pay.

On the surface, the smartest thing to do might seem to be to find a company that offers a low excess. However, higher excess amounts have the benefit of requiring lower monthly premiums.

So, what should you go for? Both options have their advantages, meaning it comes down to what you prefer. That’s why it’s something essential to think about before going with any particular policy.

What is the claim limit?

Insurance providers wouldn’t be financially viable if there were no limit on what you could claim. This is important to keep in mind when taking out a policy because you don’t want to be stuck with a hefty bill after something terrible happens.

Look at what claim limits are set at and see how many different policies you’d need to take out to cover the rest of your belongings. If you don’t have a lot of expensive items, this probably won’t matter so much. If your stuff is relatively pricy, though, you’d be best finding a policy that sets its claim limits towards the upper end of the scale.

Is there trace and access cover?

Plenty of things can go wrong in your home, some of which can cost a pretty penny to fix – for instance, springing a leak.

If your home becomes subject to water damage and mould, the cost of fixing and replacing everything can be substantial. That’s why you want additional factors like trace and access cover provided in your policy. This foots the bill for a professional to come to your home and identify where a leak is coming from. It doesn’t cover the cost of fixing the issue, but it still alleviates some of the financial burden of having a leak in your home.

Identifying and dealing with water damage is something you need to do as soon as possible. So, if having trace and access makes it easier for you to achieve, you should seek out a policy that includes it.

Can you get a no claims discount?

It’s easy to see home insurance as a worthwhile expense because you know it will protect you should your property be broken into or damaged. However, if you continue making payments for months or years without ever needing to make a claim, it can start to seem less essential.

That’s why it’s worth finding out if providers offer a no claims discount after a certain amount of time. If they do, then you can rest assured that your monthly premiums will drop after so long without a claim. Losing a little less on your bill each month might not seem that significant, but the money you save can really rack up after a while.

Does it offer new-for-old?

Everything in your home has value, some things more than others. If any of this stuff were to be damaged or stolen, you’d want to replace it. What would you replace it with, though?

The benefit of having new-for-old cover is that the insurance company will pay for replacements that match the value of your items. It doesn’t matter if the item has depreciated in value since taking out the policy.

Not every policy has this cover, and those that provide it don’t allow you to include every single item you own. It’s worth researching where this is offered, and if so, what the limitations are. Moreover, should the company claim one thing then provide another once you go with them, you may be able to seek help from the Financial Ombudsman Service. They cover a lot of different complaints about home insurance should you ever need them.

Taking out home insurance is always a good idea. To ensure you get a policy that works right for you, though, make sure to consider this stuff first. It will benefit you in the long term.


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