There are many traps with home insurance. We highlight a few so you can avoid them.
What is home insurance?
Home insurance generally comes in two type – home or building, and contents.
Home or building – this covers your house structure. It generally covers all structural items such the house, garage, sheds, etc. as well as all fittings. This will mean that your kitchen, bathroom and so forth are insured. In a lot of policies it doesn’t cover items like curtains or carpets. If you want these items covered then speak with your insurer to find out the best way to achieve this.
Contents – this covers everything in your home that is not part of your house. When buying this cover you should consider things like your clothes, kitchen utensils and appliances and toys. These items may not sound like they’re worth much but they will quickly add up and you may find that you don’t have enough cover if you lose everything. Of course don’t forget to cover the big ticket items like computers, jewellery, TV’s, etc.
Traps to avoid
- Tenants – if you rent out your spare room you may not be covered under a normal policy. You may like to consider taking out landlord insurance or checking your policy to see what is covered. If your tenant steals from you or damages your property you will almost certainly not be covered.
- Accidental damage – some policies will not cover this by default. If you cause the damage by accident (leaving a tap running for example) your insurance may not pay for the damages. Most insurers will have this cover available but you may need to request it as an addition to your policy.
- Home business – let your insurer know if you work from home. Some insurers may refuse a claim if they find out about this and you haven’t disclosed it.
- Lock up – if you leave your house open and someone steals something your claim may be rejected. Make sure you lock up your house securely. And if you have an alarm installed then turn it on when you go out.
- Lock and alarms – if you let your insurer know that you have an alarm and they may reduce your premiums. Window locks are also a good way to reduce premiums and improve security.
- Underinsurance – we always talk about this at lockr. Keep an accurate home inventory in lockr and use this to make sure you are fully covered. Not having enough insurance can make a devastating experience even worse if your claim isn’t fully covered. Even for partial claims you may find that your insurer reduces your payout to reflect that you weren’t adequately covered.
- Policy limits – some items like music collections, jewellery, etc. have limitations. You may have an exceptional CD collection but the limit on your policy may see you out of pocket if you lose it. The same thing usually applies to jewellery as well and may even come into play for electronics like computers and tablets.
- Items outside – if you take some items like jewellery, watches, computers, etc. away from your house you may be surprised to learn that they’re not covered once you leave your home. Most policies will have an additional cover option to protect you in these circumstances. Check with your insurer.
- Empty house – if you leave your house empty for an extended period and it gets robbed or damaged your insurer may refuse your claim. Check your policy to see if this might apply to you and take appropriate precautions if it does.
- Floods – if you live in a flood prone area then check your cover. Your policy may not cover such an event by default and it best to find out before you need it.
Keeping these tips in mind is a good way to ensure you’re coverage works for you when you need it.