Many people have made these common mistakes, which have resulted in a reduced payout from their insurance providers when they have needed to make a claim. Use our list to help you seek out the right level of insurance and the right type of cover for your situation.
Taking out the wrong type of home insurance policy
There’s a surprisingly high number of people who have found they can’t make a claim when they need to because they’ve mistakenly taken out the wrong type of insurance for their home.
By understanding the difference between the various types of home insurance policies available from insurance providers, you will be able to save a lot of trouble and money should you need to make a claim.
The main types of home insurance are:
- Contents Insurance
- Buildings Insurance
- Combined Insurance
If you are renting a property and you want to take out home insurance, choosing a contents cover home insurance policy is usually the right option. This type of home insurance policy will cover your personal possessions that can be practically moved, items such as laptops, watches, handbags, TVs, furniture and clothes and jewellery.
Your landlord will probably have already taken out a buildings insurance policy to protect themselves if something happens to the building or structure of their property. This means that you will only need to insure your own contents or personal possessions that are inside the rental property.
If you are unsure as to what constitutes items that can be covered under a contents insurance policy, then you can clear up any grey-areas that might be bothering you by reading the financial ombudsman’s guide to contents insurance.
Buildings insurance covers the building’s overall structure, fixtures and fittings, which usually includes, appliances, carpets, baths and anything else that cannot be easily removed from a house and taken to another.
In most cases buildings insurance will also provide insurance cover for garages, outbuildings and sheds. If you have a mortgage, many mortgage providers insist on their customers taking out buildings insurance, to protect themselves financially should disaster strike.
Combined Home Insurance
Some insurance providers will offer home insurance policies that include cover for both the contents inside your home and the building itself.
Sometimes this is a more cost-effective option for those who own their own home, and therefore want to insure their building as well as its contents. It can be more expensive to take out two separate home insurance policies, so this is where combined insurance can really help you to save some pennies.
However, the extent of the cover will vary between different insurance providers, so it’s advisable that you read the fine print when comparing quotes and policies, before you make the decision to take out a new policy. It’s important to ensure that you are getting cover for the items that you need included in your policy.
Failing to understand accidental damage
Many insurers don’t actually offer cover for accidental damage. Make sure you read the fine print before taking out a home insurance policy, to see what is actually included.
Many home insurance providers will offer you the choice of adding on an extra level of accidental damage cover to a policy, but this will most likely come with an additional cost.
This extra insurance is designed to protect policy holders in those bad luck situations when damage is caused to their possessions through negligence, such as spillages or breakages.
The insurer’s sub-letting loophole
If you are a renter and are sub-letting your rented property, then in most instances this will void any home insurance policy that you have taken out. So if you are planning on having someone move in, you will need to inform your insurance provider, to alter your policy accordingly, which could incur an extra fee.
Forgetting to secure your home
There are countless home insurance claims that are refused by insurers simply because the claimant failed to secure their property, which resulted in their possessions getting stolen. It’s no good having locks on your windows and external and internal doors, as well as a burglar alarm, if you don’t routinely use them.
If you leave a window open, the front door unlocked or the burglar alarm is switched off, you may not be able to make a claim on your home insurance.
During the process of taking out a home insurance policy, you will be asked to enter the security details of the property that you’re living in or own. Most policies will have a clause that states they will only pay out for a burglary if violence or excessive force allowed them to gain access to your home.
Just remember, if you leave a window open, the front door unlocked or the burglar alarm is switched off, you may not be able to make a claim on your home insurance policy.
Under-insuring your possessions
Many insurers offer the option of choosing a home insurance policy that allows you to choose the level of insurance cover provided. Don’t make the mistake of under-insuring your possessions, because the insurer won’t pay out the total value when you make a claim.
For example, if your home insurance cover provides £20,000 but the total value of your possessions is in fact £40,000, any claim you submit will only be paid back to you from the insurers at half of that amount, because only half of the value of your contents were insured.
Putting off building repairs
When you own your own home, in the insurer’s eyes, you’re responsible for fixing any problems that may arise. If you allow them to continue until more serious and expensive damage ensues, then a claim could be rejected by your insurer. This is because they may claim that you let the problem worsen when you were aware of it.
Forgetting to read the policy exclusions
It might sound obvious, but if you forget to read the exclusions listed in your home insurance policy and try to claim for something excluded, then your insurer won’t be liable to pay out any compensation.
Ongoing pollution and damage caused to the building from DIY repairs are common examples that can be counted as exclusions.
It’s not all doom and gloom, in the past, many home insurance providers used to include an Act of God clause to their policies, which protected them from paying out compensation for natural disasters such as lightning strikes, hurricanes or floods. However, very few insurers still include these types of clauses, but it’s always advisable to double-check what the exclusions are in your home insurance policy.
The insurer’s empty home get-out clause
As a standard procedure, many home insurance providers won’t cover you when your house is empty. The only times that this can be a real headache is when you are moving home, but haven’t sold your property yet. By taking out specialised unoccupied home insurance, you will be protected during your move, should the worst happen.
Incorrectly assessing the re-build value
When you take out buildings insurance, you will be asked by your insurer to estimate the total cost of re-building your property from the ground up. Typically, this will be below the market value of your property because the land won’t be included.
The estimate should also be on your surveyor’s report, title deed and mortgage valuation report, so it should be fairly easy to track down when filling out your buildings insurance application. Once you’ve found it, it’s a good idea to account for inflation and increase the overall figure, as well as adjust the total amount to include any improvement work that has been carried out.
Not taking into account the flood risk
In recent years many homes in the UK have been affected by flooding and water damage. Not only can this be a total nightmare to deal with if you’re unlucky enough for it to happen to you, but it can also be very difficult when it comes to insuring your property.
If your property falls under a flood map, or you reside in an area which has a high flood-risk, then it can be extremely difficult to take out home insurance that will cover you for these risks.
However not all is lost. In 2016 Flood Re was launched which offers those living in high-risk flood areas lifetime protection from flooding without having to pay out extortionate prices for their home insurance. It will be up to your insurance provider to add your property into the Flood Re insurance scheme, to help your insurance remain affordable, so it’s well worth contacting them to see if you can qualify.