Vacant Homes And Fire Insurance: Special Considerations – If you couldn’t afford to rebuild your home from the ground up and replace everything in the event of a disaster, you need to consider building and contents insurance.
The right home insurance can give you the peace of mind that your property and belongings are covered against loss, theft or damage.
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The average cost of home insurance jumped six percent in the past three months, according to industry analyst Consumer Intelligence. Recent trends are said to indicate that prices will continue to rise in 2023.
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In this guide, we’ll look at home insurance and outline the different types of cover you can choose from:
Home insurance can give you the peace of mind that your possessions and belongings are covered against loss, theft or damage
Home insurance is designed to cover the cost of any unavoidable damage to your home and to replace your possessions.
There are two main types of home insurance: property insurance and buildings coverage. You can take out each type separately or choose a combined policy from the same insurer that covers both.
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Buildings insurance covers the cost of repairing damage caused by fire or smoke, windstorms, floods, falling trees, subsidence or vandalism.
Contents insurance covers the cost of replacing items in your home if they are stolen or damaged, say by fire or flood.
If you own valuable items such as artwork, sports equipment or musical instruments, you may have to pay higher premiums to insure them for their full value.
Some policies also cover you in case of loss of property outside the home, such as mobile phones, cameras or jewellery. But you can pay more for it.
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Household insurance is not mandatory by law. But it gives you peace of mind that your home and possessions are protected in the event of a disaster.
In any case, if you’re taking out a mortgage, most lenders will insist on seeing proof that you have building insurance before they lend to you.
Standard buildings insurance will usually not be suitable if you are a landlord as there will be other people living in the building – not just you, the policy holder.
However, there are policies created specifically for landlords that can cover multiple properties under one policy and that insure against events such as:
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As a tenant renting a house or flat, you will not normally need buildings insurance as your landlord is responsible for this.
You may pay more for this if you live in a shared home where people come and go and your belongings may be at greater risk of theft.
You can also take out renter’s liability insurance. This covers you if you damage the property’s fixtures, fittings and furniture, so you can avoid losing your deposit.
Advice service Save the Student reported in September 2021 that 36% of students were victims of theft in dormitories or shared houses.
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They are considered prime targets for thieves because there will be a lot of high-value items such as laptops, phones and bicycles in one place.
Some of these items may also be left in common areas and some student houses may not be fully secured.
That’s why student contents insurance specifically exists – to protect those essentials that you may not be able to afford to replace.
If your bedroom door won’t lock, look for a policy with ‘theft and theft’ cover – there doesn’t have to be forced entry to make a claim.
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Your parents’ contents insurance may also cover some of your valuables outside the home, so check this too.
There is a certain prestige associated with living in a listed building. On the other hand, the restrictions on these character houses can make them expensive and time-consuming to repair.
Protected buildings insurance takes this into account and gives you the right level of cover should your property suffer damage and require special materials and labor to repair it.
It may also include alternative accommodation for you in case you are unable to live there during the repair.
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If your home and its contents are worth a lot, not only are you potentially at greater risk of theft, but standard home insurance may not provide you with a high enough level of cover.
If you have several items of higher value such as jewellery, watches, fine art or antiques, it is probably worth considering special high value home insurance.
As with a standard policy, you can get buildings and contents cover separately or choose one policy that includes both.
High net worth contents insurance can cover you for valuables worth £100,000 to £250,000 or more, or allow you to claim £5,000 or more per item, for example.
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Some properties – those with thatched roofs, timber frames or anything other than the usual brick construction – are often considered more prone to damage and more expensive to repair, so they may cost more to insure.
If you own such a property, perhaps you should look into specialized insurance companies that deal specifically with non-standard houses.
If you have a second home, regardless of whether you let it to guests or not, it can remain empty for a long time.
This puts it at greater risk of vandalism, break-ins and undetected damage from, say, a burst pipe – so holiday home insurance is probably sensible.
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If you have guests staying with you, there is also a greater risk of damage and you may need liability insurance in case they are injured on your property and it is deemed your fault.
Insurers don’t like properties sitting empty for more than 30 days at a time, as this increases the chances of a break-in or undetected damage to the building.
However, there is a specialized type of protection for unoccupied homes known as vacant home insurance. This covers the vacant property for longer than general home insurance – usually 3 to 12 months instead of 30 days.
This could be useful if the property is empty because it is for sale, awaiting probate, between tenants or being renovated.
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Most building and contents insurance should cover storm damage to the property and your belongings inside, but you need to check your policy carefully.
There is a chance that your provider will refuse to pay based on their definition of a storm, which generally includes a one-time event with high winds accompanied by rain or snow that can damage property.
You may also be denied a claim if your property was in distress or was already damaged before the storm.
You have to be careful because some policies don’t pay for so-called acts of God. These are generally natural events that are beyond human control and could not have been predicted. These can be floods, hurricanes, volcanic eruptions and storms.
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Whether your insurance covers “acts of God” depends on your insurer’s definition, so you need to check the terms and conditions of your policy carefully.
For example, Aviva states: “Wind speeds or gusts should normally exceed 55mph (48 knots) to be a ‘storm’, but we also take into account other factors such as where the property is located.”
Although not required by law, it is recommended that a landlord take out specific landlord insurance which can cover not only their building and fixtures, but also rental income, public liability and accidental damage.
Most mortgage lenders will not approve you for a mortgage unless you have buildings insurance from the date of the exchange.
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Home insurance protects your property and the assets in it, while mortgage insurance (known as mortgage repayment insurance) covers your mortgage payments in the event you become ill or lose your job.
From January 2022, insurers cannot charge an existing customer renewing home insurance more than they would charge a new customer taking out an equivalent policy.
But that doesn’t mean you should just renew with your existing insurer, as another provider may be cheaper. Always shop for better deals.
Some promoted products come from our affiliate partners from whom we receive compensation. While we try to list some of the best products available, we cannot review every product on the market.
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Although the information provided is believed to be accurate as of the date of publication, you should always check with the product provider to ensure that the information provided is the most current.
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