As homes are at greater risk from external factors, this feature assesses the various forms of home insurance available and how housing lending schemes impact on insurance accessibility
A house is arguably one of the most expensive items an individual will ever invest in. Not only is it pricey with regards to down payments and mortgages, but the regular upkeep of bills further adds to the cost of a home. Because the cost of a home is already incredibly high, it is vital to ensure that a home is insured in order to protect homeowners’ pockets further. Particularly in the UK, certain factors such as changing weather patterns have meant that the need for home insurance is on the increase. Furthermore, with the rise of different lending schemes such as the help to buy scheme, the accessibility to certain types of home insurance now greatly varies between different households. With that being said, this feature wishes to establish and understand the process of home insurance and how this provides mortgage protection for individuals on different lending schemes.
Home insurance, also commonly called homeowner’s insurance, is a type of property insurance that covers a private residence. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.
There are various types of insurance that protects the actual structure of a home, along with the contents inside. These types of home insurance help fight against things like fire, flood, theft and extreme weather. The three types of home insurance are listed as:
Buildings insurance:
Buildings insurance protects the actual bricks and mortar of any given home. While each policy varies, it generally covers the costs of repairing or rebuilding your house if it’s damaged or destroyed by:
- Flood and escape from water
- Fire, smoke and explosions
- Storms and lightning
- Natural disasters like earthquakes
- Subsidence (not all policies cover this)
- Malicious persons and rioting
- Collision by vehicles or animals
- Falling trees
- Collapse of aerials or satellite dishes.
Permanent structures (like fitted kitchens and bath suites), as well as outbuildings (such as sheds and garages) are also covered under most buildings policies.
Contents insurance:
Contents insurance essentially protects all the items in a home which aren’t part of the structure – the sofas in the living room, beds in the bedroom, mirror in the hallways, for instance. Even the contents of a freezer can be covered. The policy offers protection against loss and damage caused by:
- Flood
- Fire, smoke and explosions
- Theft and attempted theft
- Vandalism
- Storms and lightning
- Natural disasters
- Falling trees
- Leaks from heating or water fixtures.
With contents insurance, it’s worth noting that a homeowner is not covered against general wear and tear. It only protects a homeowner if their belongings are damaged or destroyed due to the factors listed above.
Read the rest of the article in our June edition
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Editor, Showhome Magazine
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