Home insurance, often known as home and contents insurance, is essential for any home owner and is often a pre-requisite to being approved for a mortgage.
If this is your first time buying a house, here is what you should know about home and contents insurance:
You will receive a home and contents policy document, which outlines the terms and conditions of your insurance. This should include things like: the property which is covered, the name of the policy holder, what it is covered for, what it is not covered for, and optional and extra coverage.
Home insurance is usually broken down into two parts: the buildings (structure, walls, ceilings, infrastructure), and the contents (furniture, appliances, personal effects). Both should be defined in your policy.
There are two major types of contents coverage:
- Those which cover the value of your possessions
- Those which will replace you possessions with new, equivalent items (“new for old”)
“Defined events” are the events and circumstance when you insurer will cover you for loss and damage. They should be clearly defined in your policy, and commonly include things like fire, burglary, theft, vandalism, storm damage and accidental damage.
“Specified limits” describes the maximum amount your insurer will pay for certain items. These should be defined in your policy, and commonly apply to jewellery, paintings and artwork, and collections.