As a new homeowner you have just made probably the single, biggest financial commitment of your life.
With such a big investment you want to make sure you take adequate precautions to protect that investment for the future. As it’s also going to be your living environment for the foreseeable future you will also want to make sure that the property and the possessions inside are safe.
Most new homeowners will already have thought about getting some home insurance for their property. For others the outlay and expenditure of acquiring their first property may have stretched their finances, but they should also be considering getting home insurance as soon as possible.
This is a guide for new homeowners looking to buy home insurance.
At the outset it’s a good approach to shop around and get the right deal. Home insurance, like most other insurance policies, operate in a highly competitive market. The popularity and growth of aggregator online brokers make searching for products quick and easy. Type in your details and requirements and you can search lots of insurers in the space of minutes. You can also buy policies from your mortgage provider, bank or even supermarket.
The average cost of a buildings insurance policy stands at £209, and has risen by only 2% over the past ten years.
The average cost of contents insurance is £152 and has risen by 5% over the same period - still a very modest increase in view of the cover provided and amounts which insurers pay out.
Getting the right level of home insurance cover is important. Go for a cheap insurance and you might not be covered for the things you may need it for most. Likewise over estimating the level of cover you need will mean you are paying for a more expensive policy than you really need.
While most buildings and contents policies will cover the same "core" risks, terms and conditions will vary, so start by assessing the risks you want to protect against.
A local insurance broker can help to assess your needs. For example, the level of alternative accommodation costs that will be paid will vary between policies. This can be very important if you suffer a flood or serious fire, when you may be out of your home for a number of months.
Since premiums are based on risk, reducing the risk of fire, flood damage and burglary can mean cheaper insurance.
Some straightforward measures you can take against fire and burglary loss include:
* Fit approved locks to doors and windows. The level of security will depend on the type of doors and windows, so talk to insurers first. Do not forget that in some cases (such as if you live in an area with a high crime rate) insurers will require a prescribed level of security to be installed before they can consider offering cover. Many insurers insist that window locks are fitted
* Intruder alarms. Installing an approved alarm can typically reduce your premium by between 5-15%.
* Occupancy. Reflecting the fact that most burglaries occur during the day some companies may quote cheaper premiums if someone is usually at home during the day.
* Fit a smoke alarm. With the costs of domestic fires rising, some insurers may offer cheaper premiums on both buildings and contents policies if you fit smoke detectors.
Reducing flood damage risks
If you are one of the two million homeowners whose home is vulnerable to flooding, taking steps to reduce the risk of flooding, or the cost of damage if it does occur, can make house insurance more readily available and possibly cheaper.
If your home is particularly vulnerable you should consider:
* Replacing timber floors with concrete and cover with tiles;
* replace chipboard/MDF kitchen and bathroom units with plastic equivalents;
* replace gypsum plaster with more water-resistant material, such as lime plaster
* move electrical points well above the likely flood level.
Remember that these changes will usually pay for themselves by the reduced damage, often from a single flood.
You should speak to your insurer or broker before taking on these more costly projects to assess their benefit to you.
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