A First Buyer’s Guide to Home Insurance

Home Insurance is essential for homeowners, but it is a complex topic that can be confusing to first-time buyers. However, if you want to protect your investment and limit costs related to your property, then you’ll need to have a deep understanding of how it works. Here’s a first time buyer’s guide to home insurance. We will discuss what home insurance generally covers and the various types of covers you can buy in addition to a general home insurance policy.

How Home Insurance Works

Home insurance has two basic parts: buildings and contents. Building insurance covers the building itself. It will pay for damage to the structure caused by fire, flood or bad storms, among other things. 

Contents refers to everything that isn’t part of the structure of the home. If you can pick it up and move it to another house, it counts as contents. This includes your furniture and personal possessions. You can insure these contents against theft or loss. Homeowners insurance has terms and conditions. It may limit how much you can be reimbursed if your home’s contents are damaged or lost in a fire or flood, so check the coverage under a home insurance policy before you sign up for it.

Homeowners insurance is different from renters’ insurance. Renters’ insurance, if you have it, only covers your possessions. Your landlord is responsible for insuring the building you live in. As a homeowner, you need buildings insurance to cover the building you now live in. It is advisable to have both building and contents insurance before you move your stuff into your new home.

If you are buying a leasehold property, then the freeholder will probably be responsible for securing buildings insurance cover, while you need to get contents coverage. Furthermore, if you have a mortgage like most people, buildings cover will be a condition of having a mortgage because it protects the lender’s investment in your new home. However, you don’t have to buy buildings insurance from your mortgage lender. You should shop around to find a good deal. This is true even if the mortgage insurer offers both contents and building insurance. Use Homebuyer Conveyancing to compare local first time buyer conveyancing solicitors quotes without entering any personal details.

Homeowners insurance typically covers the cost of repairing structural damage to the roof, the walls, and other key structural elements. It generally doesn’t cover repairs for things like the heating system or the major appliances. That is where cover or additional riders on your homeowner’s insurance come in.

Boiler Coverage

If your boiler breaks down, you may be without hot water or heat for your home. It is one of the biggest home emergencies you can face. On top of that is the massive repair bill for boiler repairs. 

Thankfully, companies like Certi.uk offer all types of boiler covers that can help cover the cost of repairing the boiler without spending a fortune to do it. This type of coverage will pay the cost of both boiler maintenance and heating system maintenance to minimise the chances of a breakdown and pay the cost of repairing it when it does. Good boiler coverage will cover the cost of the call out, parts and labour. 

Coverage also ensures that a qualified engineer handles these emergencies, so you know that the work was done right the first time. Some of their plans will even include things like pest control, electric components, windows and doors, and plumbing, so that is definitely a thing you should consider.

Good boiler coverage will cover the cost of replacing not just the boiler if it breaks but controls like the thermostat or programmer. The best policies will replace the boiler if it cannot be repaired. Also, note that cover levels vary between insurers. For example, some have limits on the coverage per claim or only cover up to two call-outs a year. Others will only cover replacing a boiler if it is over seven years old but won’t cover a boiler over fifteen years old.

The only times you may not need a boiler policy is if your home insurance policy already provides boiler cover. Note that many boiler policies will not cover maintenance tasks like removing sludge, repairing faulty showers or non-gas appliance repairs, however. They may not cover dual purpose boilers, either, so verify that the boiler insurance coverage covers this rather than assuming it will.

Insurance Policies that Will Pay the Mortgage When You Cannot

Mortgage Payment Protection Insurance or MPPI covers your mortgage payments if you’re unable to pay them. MPPI typically covers the mortgage payments for a set period of time due to an accident, illness or unemployment. 

You don’t have to have this type of insurance, nor do you have to buy this type of insurance from the mortgage lender. Critical illness is a similar type of insurance coverage. It only pays out if you are diagnosed with one of the illnesses specified in the policy. If diagnosed, you’ll receive a tax-free lump sum you could use to pay living expenses such as your mortgage payment. Income protection insurance specifically pays out when you cannot work due to an accident or illness.

Life insurance will pay out after you pass away, allowing relatives to pay the mortgage or pay off the mortgage altogether. Don’t be pressured to buy life insurance or any other insurance from your mortgage broker.

What Good Contents and Building Insurance Policies Look Like

You shouldn’t just look at price when shopping for contents and buildings insurance policies. You should select policies that provide the right level of coverage for your needs. For example, building insurance must cover the cost to repair or replace the home if it is destroyed. Contents coverage should pay to replace everything you don’t want to pay personally to replace.

You should also calculate the amount of contents insurance you need if you don’t have an “unlimited sum insured” or “bedroom rated” policy. There are plenty of contents calculators online that will allow you to calculate the total replacement value of your possessions. Another thing you could do is add up everything you own and check how much you’d have to pay to replace everything based on today’s prices. However, you’ll have to value down items that might be subject to wear and tear, like clothing and bed linens, for instance.

How All Insurance Policies Are Priced

Insurance policy pricing is based on the perceived risk the insurer is taking, whether you’re talking about building coverage or boiler coverage. The greater the risk of a claim, such as with an older boiler or a home in an area prone to flooding, the higher the insurance premium you’ll pay. 

The price of the premiums will also be directly affected by how expensive the unit is or the extent the insurance policy. Some policies allow you to waive the excess you have to pay when a claim is filed. If you don’t pay the excess of the cost, the cost of your insurance coverage will increase.

Conclusion

Home ownership brings with it the obligation to protect your home and everything in it. Do your research so that you have the right level of coverage without paying more than is necessary.