Home insurance typically comprises two main elements – which may be bought separately, but which might prove cheaper if bought together from the same insurer:
- just as it says, this element of cover protects the structure and fabric of your home from such potentially serious threats as fire, storm damage, impacts, flooding, and vandalism;
- since any of these might result in the total destruction of your property, the sum insured is typically set at a figure that covers the cost of completely rebuilding your home as well costs for clearing the site;
- if you are buying your home with the help of a mortgage, your lender almost certainly makes adequate building insurance a condition of the advance;
- once again, this element of cover is fairly self-explanatory – covering the contents of your home against loss or damage;
- as the Citizens’ Advice Bureau points out, this type of home insurance is suitable both for owner occupiers and for tenants who are renting their accommodation.
In common with many other forms of general insurance, both building and contents cover typically incorporate compulsory excesses – the first part of any claim which remains your own financial responsibility.
It might be noted that the amount of excess you need to pay might vary from one type of claim to another – £50 or £100, say, for repairs to minor damage, up to £1,000 or so if your home suffers subsidence.
Knowledge that any claim is likely to bring with it a demand for your financial contribution to any settlement might incline some householders simply not to bring the claim in the first place.
Home excess insurance
Home excess insurance is also just what it says – a separate, standalone insurance policy which indemnifies you by reimbursing the excess you are required to pay (provided, of course, that you have arranged sufficient excess insurance to cover the excess payable).
It may be bought quickly and easily online from independent excess insurance specialists – such as Bettersafe and others – and might go a long way to easing any apprehension you might otherwise have had about making a claim on your main home insurance because of the excess that has to be paid.
Twice the benefit
You might also use home excess insurance to double effect and advantage.
When you arrange the cover for your home and its contents, you are advised of the various compulsory excesses that might apply, but also asked whether you wish to accept a further, voluntary excess in return for lower premiums – the greater the risk you shoulder yourself, the less your insurer needs to cover and the lower the premiums that need to be paid.
When considering that offer you might be attracted by the prospect of reduced premiums but wary of the additional cost you have to bear in the event of a claim.
If you have arranged adequate home excess insurance, however, you need not have to worry about any amount of excess that needs to be paid in the event of a claim. Thus you may rest easy in the confidence that premiums may be reduced by accepting a level of excess that is, in any event, going to be reimbursed by an excess insurance policy (up to the policy’s set limits of course).