iQep: Insurance & Finance

Buildings insurance protects the structure of your property against ‘acts of God’ including subsidence, earthquake, fire, flood and any other specified events in the policy, which can vary depending on where you live.  If you live in an area prone to flooding, you will be more interested in protecting against flooding than if you live on a geological fault line when subsidence may be a more pressing issue.

Buildings insurance covers you for the cost of reconstructing your property should such an event damage it, whereas contents insurance protects the contents of your property against events such as theft or accidental damage.  New-for-old is the contents policy type chosen by most people, although indemnity insurance is also popular because it is cheaper.  Indemnity insurance only replaces items with those of the same age and condition wherever possible, whereas with new-for-old you receive brand new replacements.

Both types of policy, contents and buildings, can be tailored to suit your specific needs, and when you receive home insurance quotes, you need to verify that you will receive adequate cover, neither more nor less than your requirements.

Home insurance quotes will not normally include items you take on holiday, as you will need to arrange separate travel insurance for these.  They will however cover items you take out of the house on a daily basis such as jewellery, watches, and cameras.

Use comparison websites and insurance brokers to find home insurance quotes and narrow the choice down, and do not simply renew an existing policy, as the premiums will almost certainly have increased.

You will want to compare home insurance to see where you can get the cheapest price and the best cover.  Though these two terms do not usually go together, it is actually possible to get good cover for less money than some insurance providers charge.  The best way to find out what you can get and the cost of the premiums is by carrying out an online price comparison.

The comparison should take into account everything you need to insure.  If you live in a flood prone area you will need to purchase flood insurance and if you keep Dobermans or Rottweilers, you should consider taking out a suitable policy.  If you live in a cottage with a thatched roof, you may have to look for a specialist insurance company, as most will offer only expensive or limited cover or may choose not to insure you at all.

It is essential to compare a number of home insurance companies, because that is the only way you will see the differences in what they charge.  For similar levels of cover, you will find that different companies charge widely varying premiums and you will obviously want to purchase your insurance from the one offering the lowest price.

Something else to consider when making your comparison is the customer service track record of the company and how well they handle claims.  It is no good having insurance if your company has poor customer service and is reluctant to process claims promptly when they are found to be legitimate.

For those who actually look at their home insurance policies, they may find a confusing jumble of words and phrases.  What do they mean?  In addition, will they affect the amount of money I’m due in the event of a claim? 

Some of the terms could have a definite impact on a claim.  For example, the term ‘Exclusions’ is an extremely important one.  Anything listed under Exclusions will not be paid in the event of a claim.  Most policies exclude damage as a result of radioactive contamination, acts of war, acts of terrorism, pollution damage, deliberate damage which you cause, and damage or loss resulting from the property being vacant for 60 days or more. 

Will these have an impact on you?  Difficult to say, of course, since one can’t see into the future.  However, be aware of them so you can insure yourself with a separate policy, if needed.  For example, if your job sends you away for more than 60 days, you may want to purchase separate cover to protect your home while you’re gone, or if you decide to rent it out.

Another term is ‘Endorsement’.  This simply means a change to your individual policy.  For example, if you or the insurer change the liability limits, rather than re-write the entire policy, you’re likely to receive an endorsement that simply outlines the changed information and says that the rest of the policy remains in effect as stated on the original document.

Ask questions of any terms you don’t understand so you know where you stand with this important document.

Going to an insurance company on the recommendation of a friend only to receive a higher quote may not make sense.  Your friend, who has a home, car and material assets that are worth much more than your own, pays the same, if not sometimes less in home content insurance than you were quoted. You are both confused as to why this is.

There are quite a few deciding factors when it comes to content insurance.  Listing the value of the items you intend to insure is only the beginning.  There is often a ceiling placed on how much your new 52” television is worth to replace, regardless of how much you feel it’s worth. Replacement value is not the only consideration when you are getting a house insurance quote. Mother Nature is mixed into your cost as well.

If you are seeking house insurance quotes and you just happen to live in an area that gets hit by tornados, hurricanes or has frequent hailstorms, you can expect to pay more.  If you live beside a lake or a river that is notorious for flooding, you can expect to be charged for these natural inconveniences too.  Trying to obtain flood insurance in a known flood zone is difficult and even times, impossible as many insurance companies will use the acts of nature exempt clause. This means if you suffer a material loss due to unforeseen acts of nature, such as flooding in a flood zone, the insurance company is not obligated to pay.

Your new pal from the local volunteer club mentions one evening that they just happen to live two blocks from your house and they recently got a great insurance rate for their contents.  You are definitely interested and head off to visit this recommendation the very next day.  When you get to the insurance company’s office, you are quoted a higher price than your neighbour.  Your neighbour’s property taxes are a little higher than yours.  You know this because you shopped around before you bought your current home.  Their house is also worth a little more and their contents are definitely worth more than yours.

So, you are left confused and frustrated as to why they were quoted a cheaper house insurance rate than you were.  It may not have as much to do with your street address as it does with your entire neighbourhood.  If your area is one of those old neighbourhoods complete with large established trees, there’s a good chance it is central, in the middle of a large city or busy town. Central neighbourhoods are generally targeted more often for theft, even petty theft.

Older neighbourhoods do not always have the security of the newer ones, such as large fences or garages.  This generally makes them prime targets for home invasions.  If your neighbourhood is one that suffers from a high crime rate, or even from high crime statistics, the cost of house insurance, and especially home content insurance, will get very high.  Crime statistics have a lot of influence when it comes to household insurance.

When you contact providers, requesting home insurance quotes, they take into account the amount of cover you are asking for, as well as the risk they are taking on when they insure you, in order to calculate the premium.  The higher the risk the insurer is taking, the higher the premium will be, because they need to balance the probability of paying a claim and the premium they charge to offer cover.

You can take some simple steps to reduce the risk of making a claim and if you can convince your insurer that you have done so you are likely to receive a discount on your premium.  For example, if you fit locks to all your windows as well as a BS3621 level five deadlock to your doors you can often save up to 10% on your premium.  The same applies for an alarm fitted by a certified technician and over the years a no claims discount can substantially reduce your insurance premiums, as the provider recognises that your policy poses a relatively low risk.

In addition, if you reduce the amount the insurer has to pay out in case of a claim you are also likely to pay a lower premium.  If you opt for a higher excess the insurer will reduce the premiums, because the amount of any claim will be lower.  However, there are certain risk factors, such as flooding, which you cannot really do anything about; you will not be able to convince a provider of building insurance to reduce their flood risk premium.  The best you can do is to shop around to find the cheapest buildings and contents insurance by comparing on the internet or by haggling on the phone.

If you compare home insurance products across a number of providers you should be able to locate the best policy for you.  There are many home insurance deals on offer, which you can find by using comparison websites.  Many of these sites feature over fifty home insurance companies for you to compare, so it ought to be relatively easy to find two or three that meet your requirements.

You may be tempted to opt for a company that offers cheap house insurance deals, but it is vital that you check that you will be properly covered before opting for the least expensive home insurance quote that you find.  Be sure to take time to compare what it is available and focus on what each company’s insurance policy covers, rather than the low price that they are quoting.  Cheap home insurance deals may seem like the best choice, but it is important that you check that they provide a policy that matches your requirements.

If you are a student, then you will need to look for companies that offer specialist insurance.  Specialist insurance will provide cover for personal items, such as CD players, laptops, TVs and games consoles, which are kept in rooms to which several people have access.  You can use comparison websites to help you find companies that offer suitable specialist contents insurance policies.

You should obtain quotes from two or three well established and reputable insurance companies, save them and compare them to find the best home insurance deals and policies.  Most home insurance comparison websites require you to open an account, which is usually quick, easy and free.