family home insurance

How to Choose Home Insurance Cover for Your Family Home

When shopping for insurance for your family home, it is important to remember that there are two different types of insurance that can be bought separately or combined into one policy. Buildings insurance covers the structure of your home including the main building. You can extend cover to include fences, swimming pools, tennis courts, sheds and garages. If you rent your home, your landlord should have bought buildings insurance himself. If you have taken out a mortgage on your home, your lender may have insisted that you buy buildings insurance yourself. Contents insurance, on the other hand, covers all of your belongings and your possessions within the home such as furniture, decorations, clothing, food, art collections, valuables, antiques and jewellery.

How Much Buildings Insurance Does My Family Need?

On your policy, you will see that there is a “sum insured” amount, or the amount of money that the insurance company will cover your home. It is the highest amount that the insurance company will pay you, even if your home needs to be demolished or is burnt to the ground. Additionally, it is also the amount that it would cost you if you were to rebuild your home from the ground up, but it is important to know that it is not the same as the market value of your home, or the amount you would receive if you were to sell it on the market. While you can work out the sum insured by yourself, the process can be complicated if you are not familiar with the terms and figures. To determine how much cover you need, you may be able to find an insurance company who will provide you with unlimited cover. Other companies take the type, size and age of your property into consideration, as well as the location of your home.

How Much Contents Insurance Does My Family Need?

The sum insured is also the same for contents insurance. While some people may assume that the value of the contents in the average family home may fall anywhere between £25,000 and £35,000, the actual figure is closer to £45,000. It is important that you do not underinsure yourself, or you may be faced with paying a large sum of money out of your own pocket if the insurance company does not cover the entire cost of repairing or replacing your belongings. To get a better idea of how much contents insurance you need, go through each room of your home and write down what it would cost to replace each item if you were to go to the store today. Do not factor in age unless you have had a professional appraisal done on the piece. The only exception to this rule is linens and clothing, which would naturally decrease in value over time with normal, everyday wear and tear. Additionally, if you run a business out of your home, you may need to buy additional cover for any equipment or loss of wages as the result of damage or an uninhabitable home.

Copyright Sophia Cohen 2012