If you’re fortunate enough to possess valuable items, such as an original line drawing by Picasso or a Faberge egg and choose to keep them in your home, you’ll have to take out separate cover for them. However, for most of us a regular home contents insurance policy will be more than enough to cover the loss or damage of most items in the house.

When you take any of your possessions away from home for the day they will probably be covered by the house contents insurance policy. These include such things as bags, cameras, jewellery and the like. However, taking them away on holiday with you will probably necessitate taking out separate travel insurance.

Home contents insurance may well cover things in your garden too, which many providers class as another room and also freezer contents. Many elements of the policy will be optional, so you have to think carefully about exactly what you want insured.

There is usually an excess and increasing this will result in slightly lower premiums, but when you make a claim you may find yourself having to stand the first £250 or so before the insurer pays out the rest.

Compare quotes before settling on one to suit your requirements, as there are many home contents insurance policies available.

If you live in an area where your home is likely to be damaged by storms or vandalised then it may be worth looking around to see if you can find an insurance company that offers special cover for high risk homes. Even though the majority of house insurance policies do not cover high risk homes, there are some specialist insurance companies that will provide home and contents insurance for those who live in areas prone to severe weather conditions or crime.

If you do opt for a specialist insurance company then be sure to read through their policies carefully. Comparing companies and obtaining quotes will give you a good idea of what you will be covered for based on the information you provide, and will allow you to find the best deals.

As well as claiming house insurance for a property in an area that is prone to severe weather conditions or crime, you can also claim specialist house insurance for a property that is prone to fire damage, such as a thatched cottage. However, there may be certain procedures that you need to follow in order to increase the safety of your home, so it is a good idea to read through specialist home insurance policies carefully.

What is the sum insured?

‘The sum insured’ is the term for the maximum amount a buildings insurance policy will pay in the event of a claim. Because of this, the sum insured should directly reflect the cost of rebuilding the property from scratch. Which is to say in the event of everything being completely destroyed. It should never reflect the market value of the property; the price you’d receive if the property were sold.

How to calculate the sum insured.

Calculating the sum insured can be a little complicated, so it is advisable for most homeowners to bring in assistance. For a small fee, a chartered surveyor (a registered member of the Royal Institute of Chartered Surveyors) will prepare a professional rebuilding cost assessment that can be used for insurance purposes.

Unlimited Cover and Simplified Assessment

As alternatives to the above, some buildings insurance policies will offer unlimited cover, while others offer cover based on a simplified assessment using pre-set criteria.

Many us tend to forget the outside world when we are inside our home, we feel safe there. With the doors locked and a few other measures taken, we feel invulnerable. Perhaps we just feel like we don’t own anything anyone else would consider worth taking, but we are wrong.

Here in the UK, one in every three of us will fall victim to burglary at some point in our lifetime. One in three – do you really want to take the risk of being uninsured when that happens?

The average family’s worth

The average British family is worth £45,000 in home contents alone.  For many of us, that is more than a year’s wages, maybe even two. Therefore, wouldn’t it be prudent to invest in a home contents insurance policy? If your possessions were stolen, your home burned down or there were some other unforeseen tragic event, you would never recover.

What to look for in my home insurance policy

Your cover should always be based on what it would cost to completely rebuild your home and/or replace all of your possessions. By shopping around you can find differences of over £60 a year; that amounts to some £1,500 in savings over a 25-year mortgage.  By avoiding building and tie-in deals, you can easily achieve a saving of up to £150 per year. That’s £3,750 saved over a 25-year term. Put that into a pension fund and you’re looking at a gain of £10,000. Take a little time to obtain a home insurance quote that covers exactly what you need and no more.

First, get solid figures to base your request on for a home insurance quote.  What is your home worth?  Does that include the land?  What value should be placed on the contents?  If you haven’t valued the contents in a while, go through each room taking an inventory of all the major items in it.  You may well discover that you have more DVDs than you thought possible, and replacing them would be a major expense. 

Once you have the basics down, enter those on a few websites that offer free quotes.  Request the same cover for each quote – this part is critical.  It’s impossible to compare home insurance quotes when you have not requested the same cover.  Enter a reasonable excess – this is the part you are expected to pay in the event of a loss. This excess amount reflects what you have saved or can reasonably expect to have saved within the next six months or so.

Once you have several quotes, compare not only costs, but flexibility.  Does the insurance company offer you the option to pay monthly?  If so, is that option free?  Do they offer the option to pay via automatic debit of your bank account?  What about paying via the company’s website? 

Once you find a policy that fits not only your pocketbook but your lifestyle and is one that provides the cover you need, your hard work will have paid off.

Specialist home insurance will also provide cover for properties that are susceptible to fire or storm damage, such as thatched cottages or properties with partly thatched roofs. However, you may be refused specialist house insurance on this type of property if you fail to follow certain safety procedures. Exposing the property to naked flames or using items that are likely to cause fire damage to the property will prevent you from being able to claim specialist house insurance.

If you own a listed property or your property is old, then you will be able to claim specialist home insurance. It is important to check what you will be covered for when claiming specialist insurance for a listed property, as policies may vary depending on the insurance company. Some policies may not cover damage caused by severe weather conditions for listed properties or if the property has been left unoccupied for a particular number of days.

Specialist insurance can also be provided for students. This includes specialist contents insurance for students that are living in rented accommodation such as a student house or for students that are living in halls of residence.

Buildings and contents insurance may be offered together depending on the insurance company. Some companies may even offer discount if you apply for home insurance and contents insurance together. With so many comparison websites available, you are sure to find an insurance policy that can offer you the best deals.

When comparing home insurance companies, it is best to avoid opting for the cheapest policies. Concentrating too much on how much an insurance policy costs rather than what is included in the policy itself may result in you not being properly covered. Be sure to check policies thoroughly and be willing to spend just a little bit extra to ensure that you are properly covered.

Comparing home insurance companies will enable you to look at each company’s policies carefully to see which ones best suit your needs. Be sure to choose a company that offers policies that are relevant to you. The majority of companies cover theft and damage for floods, fires and severe weather conditions, but there may be some things that are not covered that apply to you, so be sure to take the time to read each policy carefully before applying.

The sum insured

‘Sum insured’ is the term used for the amount the policy will cover and the maximum amount the insurance company will pay you – even if your home has been entirely destroyed. It is also the amount that it would cost for you to rebuild your home. It is not your home’s market value, i.e., the amount your home would be worth if sold, and your insurance should not be based upon that number.

Calculating sum insured

While you can work out your own sum insured, the calculations can be pretty complicated, so you may want to bring in some assistance. For a small fee, a chartered surveyor who is a member of the Royal Institution of Chartered Surveyors, will prepare and provide you with a professional rebuilding cost assessment for insurance purposes.

Unlimited cover

Some house and home insurance companies offer an unlimited cover policy. This means you don’t have to worry about how much cover you need or whether you’ve got enough. Other insurers offer coverage based on a simplified assessment based on area, age, type, and size of your property.

The following are some of the more common exclusions to a typical house insurance policy, but be sure to examine your specific policy or the policy you’re considering carefully, and take note of any other exclusion mentioned in the wording.

Typically, the following are excluded from cover in a buildings insurance policy:

•    Losses resulting from nuclear power or radioactivity.  This includes burning nuclear fuel or damages from nuclear waste.  It also includes damage or danger from any type of nuclear equipment.

•    Losses or damage resulting from military action, an invasion, or an act of war, including the actions of a foreign enemy.  Often the policy will stipulate “whether or not an Act of War has been declared”. 

•    Damage or loss due to any type of uprising, whether civil or military, and whether for or against the government or not.  Terms such as “revolution”, “insurrection” and the like will tip you off to this exclusion.

•    Loss or damage to the property from terrorism or threat of terrorism.  This is a relatively new exclusion but is found in nearly all policies now.

•    Loss due to pressure waves from aircraft.

•    Loss due to pollution or contamination.  However, this exclusion often has its own exclusions, as in the case of an accident or leakage from an underground oil tank at the property.  If you heat with oil, check this exclusion carefully.

If these exclusions bother you, speak to your insurance agent about the possibility of separate cover for one or all of these circumstances.

Shop around

Never go with the first home insurance policy you find or are offered. While mortgage lenders often also provide home and contents insurance, these are not always the best deals. So, do your research.

Only get what you need

Too much cover will cost you in monthly premiums; too little cover will cost you in the event of a claim. So, don’t take the level of insurance cover you need lightly; try to get the right amount for your situation.

Make sure you’re getting what you think you are

Just because an insurer has sold you a policy doesn’t mean you’re automatically eligible to claim on it. Read the fine print and don’t be afraid to ask questions. Get written confirmation of your home insurance quote and make sure you are covered exactly as you expected to be.

Don’t be coerced (tie-ins and bundling)

Mortgage lenders are always looking for new and inventive ways to increase their share of the market. Often, this is via low-interest mortgage deals, but the lender will also try to makes up for that low interest elsewhere. They may try to insist on compulsory and over-priced home insurance policies, which is known as bundling. Another ‘trick of the trade’ is the tie-in deal, whereby the lender applies penalties when the customer decides to go elsewhere for their home insurance. These types of deals should always be avoided.