Property building and content insurance
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Buildings
insurance explained
Also
known as home insurance, this is a mandatory insurance with
a mortgage and you must have it in place. With a
remortgage
even if you already have insurance the solicitor will ask
for buildings insurance that is covering the up to date rebuild
cost and that the name of the new lender is on the insurance
schedule document. You may have to produce the paper work
before hand as evidence or sign that you have this in place
before mortgage completion. On a purchase, property insurance
must be in place on exchange of contracts, so even before
you actually move in, as your are then at that point legally
bound to the property.
The
rebuild cost of your home is the cost to totally rebuild your
home from new. An example of this would be if your house burnt
down then the cost would have to cover clearance of the plot
and a complete new house to be built. People may believe it
is the current selling value of the house which is incorrect
as only the rebuild costs are covered which would often be
far less than the value of sale as this would include the
land in the valuation. Some insurers or policies may cover
your required temporary accommodation costs and legal costs.
Accidental
cover would include the building's permanent fixtures and
fittings for example the bathroom suite, toilet and decoration.
It includes the items that would generally stay with a house
on sale of the property.
Some
lenders will charge you for not taking out their insurance,
if the property has had subsidence or flooding then you may
only be able to use your mortgage lender for building's insurance
as this is seen as high risk to insurance companies.
The
property generally may only be used for residential purposes
and have to be occupied by you, it will not cover a rented
property. Home insurance will be more expensive if you claim
and specialist insurance may be required for unusual construction
types like a thatched cottage.
Contents insurance explained
This
covers all contents of the home and personal possessions but
beware there are restrictions. Expensive items over a certain
amount may increase the premiums or even be excluded. There
are restrictions and extra costs for items that are taken
from the home or are more vulnerable for example possessions
in your garden shed.
Again
you may consider accidental cover for example breaking a television
screen by accident. Loss adjusters may wish to visit the property
with higher claims and request several quotes for repair.
Old age and general wear and tear will not be covered.
Please
note contents are normally covered up to a certain value within
a stantard policy and you should always ensure that you a
have enough cover in place to cover all your possessions,
this may mean an increased premium would be payable above
the standard policy. It would be also prudent to check the
policy documents for a full explanation to the levels of cover
within the policy.
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