As the name suggests, home insurance is a type of insurance policy that covers your home in the case of fire, flood, damage, or theft of your possessions.
There are three main types of home insurance policy:
This protects the actual building – the structure (i.e., bricks and mortar, steel frames etc.), fixtures and fixed fittings of the house. It covers anything that cannot be removed, like doors, pipework, and bathtubs. Although not a legal requirement, we would recommend that you take out buildings insurance to cover you in-case of any disasters.
Contents insurance protects your possessions in the house, garage and shed. Your contents policy can include items such as furniture, white goods (Fridge, washing machines) or televisions. You could potentially add any high-value items to your policy, but this will, of course, increase the cost of your premium.
People who rent their home are recommended to take out contents insurance since the landlord will handle the buildings insurance. Before signing any tenant agreement, always ask about the buildings insurance policy and cover dates.
Given the relatively low monthly premium cost of contents insurance, it is worth having, as you could cover the cost of replacing some of your treasured possessions. It’s worth bearing in mind though the ‘excess’ charges on your policy should you make a claim.
Combined buildings and contents insurance:
As the name suggests, this type of policy combines both buildings and contents insurance. Combine insurance is often cheaper than having two separate policies. According to Consumer Intelligence*, the average cost of combined home and contents insurance is £150 per year.
You can pay your premiums monthly but usually paying annually and upfront is cheaper.
What factors influence the price of combined home insurance?
Many factors influence the price of your insurance. Some factors you can directly control and others are more industry set. In general, the riskier the property and value, the higher the cost of home insurance cover. A risky property could be one classed in a high-risk area for crime, susceptible to extreme weather, or high value in terms of a rebuild (listed buildings). Unfortunately, apartments and terraced houses are rated riskier. This is because they are more at risk from fire or damage from other joined properties. Generally, older buildings are also more expensive to insure since ageing structures are more likely to result in damage claims.
Insuring your home is not a straightforward process if you are looking to ensure you’re fully covered. Everything from how your home was built and materials used to its size, location and security measures will have a bearing on the price of your combined home insurance. The value of your added contents can also increase the premium you will need to pay.
Your previous claims history can affect both your eligibility and how much you pay. Insurers take into consideration how much they may have to pay out based on your record.
What does home insurance cover?
Buildings-only insurance generally covers the structure of the building, i.e., bricks and mortar or steel frame, fittings and fixtures that cannot be removed from the property without damaging it.
Contents-only insurance covers the belongings inside. Coverage could include the smaller fixtures that you can remove like light fittings and carpets, plus any items you have included in your policy.
How could you reduce your premiums?
As we mentioned, there are some factors that you can affect that could reduce your monthly premiums. As a guide, we have listed a couple of options you could consider:
- Install a burglar alarm – Most insurers will ask about whether you have a burglar alarm installed and how often you use this. Getting one installed if you do not have one and using it regularly could reduce your premiums.
- Install a safe – If you have a lot of high-value items, investing in a safe could be an excellent option. Many insurers will charge extra on your premium to cover your high-value items. With a safe installed you may be able to reduce this charge.
- Fireproof your home – It not only makes sense safety-wise but also financially. Insurance companies can take into consideration the fire precaution measures you have taken to protect your home from fire.
- Join a neighbourhood watch scheme – Not just for the local busy body. Neighbourhood watch schemes can offer a layer of protection for residents, especially if you are out of the home a lot.
- Fit secure locks and electric gates – For added protection, fitting secure locks to your windows and doors can offer added protection from burglary. Also, if you have a personal driveway, adding electric security gates could reduce your home insurance premiums.
Get a Home Insurance quote.
Hilltop Finance’s home insurance product is Defacto 5-Star rated and underwritten by Royal Sun Alliance. Our home insurance provides great protection and customer service. Click here to get an instant online quote today or call our insurance executives on 0161 696 5217.
*Source: Home Insurance Price Index, Consumer Intelligence, Aug 2020.