Home insurance. It’s not the most exciting of topics to talk about. But unless you live in a tent, there’s a good chance that it’s part of your annual budgetary considerations. Once a year your insurer reminds you that it’s time to renew your policy and the simplest thing to do is just say ‘okay’ and sign the form. But before you put pen to paper, ask yourself this – are you paying too much for your home insurance and does it actually give you the cover you need?
If you’re a homeowner, having home insurance is in most cases a requirement of your mortgage agreement. Without having insurance, mortgage lenders will not give you the money you need to buy your house. It’s there to protect their interests as well as yours, as if anything happens to the building such as fire or serious flood damage, their investment becomes devalued instantly.
Peace of mind
But on a more personal level, doing without home insurance leaves you vulnerable to a potentially huge financial bill if things do go wrong. This isn’t scaremongering – it’s a simple fact of life. Without home building insurance, you would have to foot the bill for any major repairs to the property, and that could run into thousands of pounds. Home insurance by comparison is a bargain, costing you just a few pounds a month for peace of mind.
Contents insurance covers the contents of your home and includes everything from your furniture to high-ticket items such as home audio and visual equipment, computers and even jewellery. Whether you own your own home or are a tenant, contents insurance is there to protect your possessions against damage, theft or loss. Again, for the price of a few pounds a month, content insurance represents peace of mind and costs a lot less than having to pay to replace damaged or stolen items out of your own pocket.
A convincing argument
So the argument for having home insurance is a convincing one. But are you paying too much? As with other insurance, the cost of home insurance policies can vary dramatically from provider to provider, so to get the best deal it is best to shop around. Thankfully, that is now easier than ever, with online comparison sites seeing a massive increase in the number of people using their service to find the best deals.
Don’t leave it to chance
But remember that it’s not just the total cost of the policy that’s important, but what kind of cover it gives you. Does your current provider cover your contents for accidental damage, for example? If you have small children or pets then accidental damage may be something that could save you a considerable amount of money if furniture gets damaged or precious ornaments are smashed.
Research carried out in 2010 by the homelessness charity Shelter revealed that over a fifth of UK households have no insurance cover. That’s millions of people who are taking a financial risk with their property and their possessions. This ‘crossing your fingers and hoping that nothing bad happens’ approach to your finances may save you a few pounds in the short term, but if something does happen (and accidents happen every day), it could end up costing you much more than the price of a policy.