Do You Have The Right Amount of Home Insurance?
Home improvements are a great way to improve your home and possibly increase the value of your property. Adding an extension, another bedroom or installing a new kitchen are all great ideas for investment, but will your home insurance cover the new improvements?
Being underinsured is a common problem on both the buildings and contents side of a home insurance policy.
According to Chubb Insurance, buildings insurance can be short by between £75,000 and several million pounds. Remember your buildings insurance needs to cover the cost to rebuild the property in the event that it is totally destroyed.
Research by the moneysupermarket.com contents insurance team found that the average family of four underestimate the value of their contents by up to £30,000.
Pete Harrison from the comparison site said “While nobody wants to pay more than they have to for home insurance, failing to properly evaluate your home contents could cost you dear in the event of you having to make a claim.”
How to make sure you are fully insured
Many insurers offer online calculators to work out the rebuild cost of your home. For more information on this you can visit The Association of British Insurers who also have an online calculator at http://abi.bcis.co.uk/.
If you have just purchased your home then the rebuild cost will usually be in the mortgage valuation.
For those that live in specialist homes such as listed buildings or a cottage with a thatched roof then it is advisable to hire an independent surveyor to assess the rebuild costs.
For these types of properties the rebuild costs can be much higher due to the specialist materials or methods that may need to be used.
To accurately access the value of your possessions it is much easier. Simply take a tour of your home with pen and paper in hand and list your items room by room. Remember to include clothes, curtain and carpets and even items of personal sentimental value.
How to save on your home insurance
Naturally the higher the rebuild cost of your property and higher the value of items you insure, will inevitably increase your insurance premiums. Here are some ways in which you can keep the costs down:
- Install an alarm system on your property. It is possible to save up to 7.5% off your annual premium by installing a standard NACOSS alarm.
- Find out if there is a local neighbourhood watch scheme. A further 5% can be saved if are part of the scheme.
- Reduce the risk of burglary by upgrading your locks on all doors and windows and install security lighting on the front and back of your property.
- Keep your no claims bonus in tact by avoiding claiming for smaller accidents or items lost.
- Increase the excess payment on your policy. This is the amount you must pay when making a claim so make sure you set it at an amount you can comfortably afford to pay.
- Get rid of any expensive add-ons to your policy such as accidental damage cover.
- Quit smoking to reduce the risk of fire in your home. You will usually be asked by your insurer if anyone smokes in the house.
- Install and regularly maintain your fire alarms.
- Lock away all your garden furniture at night and do not leave tools lying about that can be used to gain entry into your property.
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