We all know that life can throw surprises at us, but home insurance can help prevent an unexpected event – whether it’s a break-in, a burst pipe or a fire – from turning into an incredibly costly affair. Instead, it gives you the peace of mind that when the unexpected happens, your home and all the belongings within it will remain protected.
Unlike car insurance, home insurance is not a legal requirement in the UK, but most homeowners and renters consider it a worthwhile investment as it can save time, money and hassle when problems occur.
However, it’s important to be informed about the details of buildings and contents insurance, as a number of simple mistakes could invalidate your policy and mean your home and belongings aren’t fully covered.
Graham Ward-Lush from Co-op Home Insurance shares some of the biggest mistakes people make and the domino effect they can have…
1. Not securing enough
For both buildings and contents coverage, Graham stresses that while it may seem like a cheaper option, it is crucial not to underinsure yourself.
This is especially important when it comes to determining the value of your home. If you declare your property to be worth less than its actual value, you may not be fully protected should a claim be filed.
Graham tells Country Living: ‘Most websites, including price comparison sites, have a calculator you can use based on the Royal Institute of Chartered Surveyors, which will tell you what the actual cost of rebuilding your house is today. It can be a good idea to start from that figure and not think, “That sounds a bit expensive, I’ll go for a lower amount.”
‘Ultimately, if you have to make a claim for £10,000 worth of building damage, the insurer will look at your under-assessment and apply what’s called an “average” claim approach. So, for example, if you were 50 per cent underinsured for the cost of rebuilding your house and you make a claim for £10,000 worth of building damage, your insurer may only pay out £5,000 of this, as you would have had to pay more money to begin with, to cover the full value of your house.’
2. Select the most economical option
Graham adds that price comparison websites show the cheapest insurance policies at the top, but they are not always the best in terms of coverage.
He explains: ‘One thing to look for is alternative accommodation coverage, which some insurers don’t include and some have low coverage limits.
‘It doesn’t really take much to make your home uninhabitable. For example, if there’s a flood or a small fire and your home is damaged, or if you leave and your home is broken into and several doors or windows are broken into, it’s not always appropriate to stay in your home.’
Some insurance policies do not include alternative accommodation as an option in their coverage, which could mean you end up paying significantly more if you need to find somewhere else to live temporarily.
Graham also adds that Co-op Home Insurance offers coverage such as ‘Trace and Access’, which provides a service that identifies what is causing a water leak in your home.
Trying to find the cause of this problem, as well as rebuilding afterwards, can be an expensive job, especially if it involves ripping out floors, breaking through walls or digging into yards. Some insurers include this as part of their coverage, so you won’t have to shell out money for it, but it may not be included in all insurance policies.
3. Not sharing all the details
Another big mistake people make is not being completely truthful in their request. While this may seem obvious, Graham explains that sometimes it’s as simple as leaving out important information.
He continues: ‘There are examples of people having their claim rejected because they hid something that the insurer needed to know when they took out the policy.
‘If you fail to inform a new insurer about a claim you’ve previously made (usually within the last five years) and then make a claim for a similar reason (for example, a burglary at your home), the insurer may refuse to cover the claim altogether.’
4. Not taking into account the limits of the contents insurance
Insurers often have a single item limit when it comes to contents cover, meaning personal possessions are only protected up to a certain value, for example £1,500.
As a result, some possessions may need to be insured under a separate “personal possessions” policy to ensure their protection. Technology, artwork, and jewelry typically fall into this category.
It’s also worth checking whether you’re covered for theft or loss of belongings when you’re away from home. Don’t assume you are, as this may not be the case.
5. Ignoring unoccupied warnings
If your home is unoccupied for a long period of time, say more than 60 days, there will be some limits on what you will be paid if you file a claim, Graham explains.
It is always good practice to check what the rules are regarding unoccupied properties, to avoid your home not being covered against damage or theft when you are away.
6. Assuming it covers everything
There are some things that home insurance policies don’t cover – for example, a burglary claim if the front door is left open.
Coverage for outdoor and garden items is another area where people can fall short. Graham adds: “For example, some insurers cover the contents of a garden shed, even if it’s unlocked. Others exclude it or may have limitations. Always check your policy’s coverage before you take it out.”
You can find more information about cooperative home insurance here.
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