Which insurance policy is best for me?

Buying an insurance policy can be a confusing time. There are so many options, so many terms and conditions to try and understand that it can give you a headache. It’s no wonder that most customers tend to stay with their current insurer for year after year. After all, who has the patience to ring several call centres and answer what seems like hundreds of questions?

We will attempt to explain the different types of cover and who it’s suitable for. This is not a fully exhaustive list and we recommend you do more research before committing on a policy. However, as a quick and easy guide it’s a good start.

Overall home insurance policies

Everyone should have some sort of home insurance. Home policies come in 3 types:

Buildings

This policy will only cover the buildings aspect of the property. This usually covers the actual physical property itself plus the bathroom and kitchen. Carpets and contents are not covered.

Good for- Landlords

Cover Amount – unlimited or as a minimum the approx. value of the property.

Buildings and contents

This policy will cover the physical aspect of the property including the kitchen and bathroom. It will also cover the contents in the house which include clothing, carpets, furniture, toys, certain types of jewellery and other content items. It’s the most comprehensive type of home insurance you can get. If you own your own property and live in it, this is the policy to go for.

Good for – Everyone except landlords

Cover amount – buildings unlimited – contents, from £50K upwards (more for families or high net worth clients)

Contents only

This policy will not cover any aspect of the physical house itself and it will only cover the contents in the house. This type of policy includes cover for electronics, furniture items, clothing and toys. It will also cover any other items that were not already in the property when the property was first occupied by the policyholder.

Basically anything you bring with you is covered.

Good for – tenants and people who rent their accommodation

Cover amount – depends but £35k is the minimum

Different types of options on the policy

Just as confusing is the sheer amount of options you can add to your policy. Some policies come with certain options or add-ons. Regardless, it is always a good idea to be aware of the cover options.

Home emergency cover

In case of a major leak or fire, if you have home emergency cover your insurer can send out an emergency plumber to assist.

Good for – everyone

Accidental damage

This used to be standard on most policies but now tends to be an option. This covers any damage that has been caused as a result of an accident. For example if you have AD cover and you drop a candle on the carpet and damage it, this is covered under the policy. This is a useful option to have if you have young children in the family but it can be expensive.

Good for – families with young children

Special contents cover

This option is very important should you own individual personal possessions which are very expensive.  An example of this would be diamond earrings worth over £3000, or a Rolex watch. These items are worth substantially more than household contents and should be named individually on the insurance policy under the special contents section. Failure to do so may mean in the event of a burglary or fire these high value items may not be covered by your standard policy.

Good for – anybody that owns a few very expensive items (usually over £1500 each)

Personal belongings cover

This option refers to the insurance cover on any items you may use outside of the home. An example would be the insurance of bikes, electronics and other items which you would use both in and outside the home.

Good for – people who use expensive items outside of their home

Legal expense cover

This option sounds unusual however it could be a good cover option to have. It offers legal expenses protection (up to a point) should you be sued by anybody who has an interest in your property. An example of this would be if a contractor tripped over some toys whilst working and decided to sue you in court. If you had LE cover your policy would pay for solicitor fees.

Good for – everyone but it’s rarely used

Matching contents cover

This option is considered unimportant until you find out that you don’t have it. An example would be if you had a leak in your home and the armchair of your matching three piece suite was damaged. Under normal circumstances insurers may only pay out for the armchair that’s been damaged and opt not to compensate you for the other two matching pieces which are now redundant. Matching contents cover means the entire suite will be replaced under the policy cover.

Good for – everyone (its a must)

This is an option that most policyholders wont be aware of. Trace and access covers all costs involved in the investigation of a leak. A good example of this would be if there was a leak from the shower. The leak isn’t obvious but then the plumber decides to break through the tiled wall and finds the leak there. The bathroom was tiled years ago and you don’t have any spare tiles. T&A cover means that any damage caused in the investigation of the leak will be covered by the policy including perhaps the re-tiling of the entire bathroom.

Good for – everyone (its a must)

They are some of the more important cover options however, there are several more. Its always a good idea to do more research and ask insurers their opinion too on what they think may be good options for you.

Contents cover type

Finally, we will also try and explain the different cover types on contents. Most people assume that if their contents are damaged the insurers will simply opt to replace. However, this is not always the case.

New for old policy

As the name suggests, if you have a new for old contents policy insurers will replace  contents with new or compensate you for the total value of the contents.

Indemnity policy

An indemnity policy differs from a new for old policy in that it will take into account the number of years you have owned the item and make an allowance for the condition of it. You will not get a new like for like replacement or the value of the items when it was purchased. An allowance is made for wear and tear.

That’s it. We have attempted to put together a quick explanation of the different type of home insurance, the additional le and the cover type for contents. Please use this list as one of many sources in your search for a suitable home insurance policy.

If you need further information about home insurance policies please speak to several insurers directly and opt for the one that you feel is the best for you. If there’s anything else we can assist you with please do not hesitate to contact Rainbow International West Yorkshire on 01278 588011