Property
building and content insurance
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 home
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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