When you buy a house and take out a mortgage, you will also want to consider buildings & contents insurance. Buildings insurance, although you are not obliged to opt for the lender’s insurer’s policy. They won’t allow contracts to be exchanged until they have proof of buildings insurance. Contents, however is an optional cover although something well worth considering after spending thousands on your belongings.
Buildings insurance covers the cost of repairing or replacing the structure of your property, i.e. your brick walls and floors. How much insurance cover you take out depends on the value of your house as well as:
- Demolition costs
- Site clearance and architect’s fees
Sounds a bit drastic but if an explosion or fire damaged your home, part of it might need completely rebuilding – could you cover that cost? Probably not, and that’s why building insurance is required. Other types of damage covered by buildings insurance include:
- Fire and smoke
- Flood, storms or escaped water (such as a flood defence or dam bursting)
- Vandalism or malicious damage
Some insurers will also allow you to add the option of accidental damage, i.e. accidental damage you cause to the property, but there is an additional charge.
Contents insurance covers exactly what it says, your contents. This means your personal belongings in your home, including:
- TVs, computers and electrical goods
- Furniture and furnishings
Contents insurance policies are based on a ‘new for old’ model, i.e. it covers the cost of replacing a damaged item with a new one. For most of us, replacing small items is not a problem, but when it comes to buying more expensive items, it’s another matter entirely.
The insurance will cover against:
- Fire, smoke and explosions
- Flood, storms and escaped water
- Theft, vandalism or malicious damage
There are two additional options; accidental damage cover should you cause an accident in the home, such as knocking over a pot of paint onto the carpet, and cover to your contents when outside, i.e. in a car.
Need help finding suitable buildings & contents insurance cover? Let our experienced team at Dimora Mortgages help you.
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