What is home insurance for?

home insurance
Home Insurance is more important than you might think

Home insurance. It’s insurance for your home. Sounds simple, right? But what exactly does it cover? Well, we’re here to fill you in on all the details…

Home insurance refers to both buildings and contents insurance.

Buildings insurance is a requirement with a mortgage. If the structure of the property is damaged it should pay for the rebuilding work. Contents insurance is optional, and covers what’s inside your home. You can get buildings and contents cover separately, or in one combined policy.

The easiest way to see how home insurance could help you, is to consider what it might protect you against. We are going to look at the five most common named claims on home insurance policies.

The escape of water comes in first, meaning floods or leaks. This is the most common and most expensive claim. The Association of British Insurers estimates providers pay out £1.8 million for it per day. It seems that replacing a flooded kitchen can be quite pricey! Research suggests that many claims are due to a neighbouring property: so even if you’d never leave the bath to overflow, this doesn’t mean your neighbour won’t. Escape of water is not always covered as standard on your insurance, so you need to be certain your policy protects against it.

Coming in second place is fire and explosion, accounting for 17% of claims. We’ll assume you know why it’s a good idea to cover your house against potential fires. Similarly, the third most common named claim is theft, which makes up 12% of claims. Again, we think you probably know why protecting your valuables from burglars is sensible.

Fourth on the list is domestic subsidence, and it’s likely the sort of thing you won’t know about until it happens to you. Essentially, it is when the ground beneath a house moves. One of the first warning signs is sizeable cracks at weak points. Subsidence is an issue because it can reduce the stability of a building. It’s usually covered under buildings insurance, but it’s best to double check.

Finally, the fifth named cause for a claim is accidental damage. Yep, you guessed it, this is to cover damage caused by accidents. Think spilling a cup of tea on your laptop or smashing your TV. If you’re accident-prone, or share your house with those who are (think children or animals), you might want to consider this cover. Be aware; accidental damage is not always covered as standard in your insurance policy.

If you’d like to discuss the options available to you, contact us today.

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