The Insurance industry in the UK is the third largest in the world and each household spends on average over £2,000 per annum a year on contents insurance.

house owners insurance, is a type of property insurance that covers the owners private house. It is an policy that combines various personal insurance protections, which can include losses occurring to one’s house, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the house owner, as well as liability insurance for accidents that may happen at the house.

One of the key issues when insuring your property is to make sure you cover the full rebuilding cost and not the market value. The land under your house is not under threat from theft, storms and fire and as the land is normally about a third of the total property value it is important to make sure you cover rebuilding costs rather than market value.

Remember, the same type of house in a slightly different area can have a lower market value than another but yet cost just the same to rebuild in the event of a fire, etc. Therefore, cover your house against the rebuilding cost, and not against its market value.

The cost of house owners insurance often depends on what it would cost to replace the house and which additional riders (additional items to be insured) are attached to the policy. The insurance policy itself is a lengthy contract, and names what will and what will not be paid in the case of various events. Acts of God (Earthquake, Floods etc) or war are generally excluded from basic deals but can be purchased if there is a risk of these eventualities, with the risk of this affecting the price of taking out the policy.

The policy could also provide you with alternative accommodation if your house is uninhabitable. Be sure to not simply opt for the cheapest building insurance quote available and think about your needs and the area you live in. Use the price comparison tool at asrecommended.com to find a building insurance policy that offers the best cover at the cheapest price.

Policies can also include cover in the event of an injury in your house. Furthermore, some contents insurance policies would also cover you for legal liability if someone were injured in your house due to your negligence or lack of upkeep of the property.

As well as the structure, house insurance also covers permanent fixtures and fittings including bathroom fittings and fitted kitchens and interior decorations e.g. wardrobes and beds. The test is whether or not the fixture can be removed and taken to a new house, for example fitted cabinets. Policies will also usually cover outbuildings such as garages, greenhouses and garden sheds but might not cover boundary walls, fences, gates, paths, drives and swimming pools.

It is possible to purchase perpetual insurance, which is a type of house insurance without a fixed term, can also be obtained in certain areas assuming the insurer earns enough to cover the costs of the damages..

In the United Kingdom, most house buyers borrow money in the form of a mortgage loan from a bank or building society, and the mortgage lender always requires that the buyer purchase house owners insurance as a condition of the loan, as to protect the bank if the house were to be destroyed. It is also a condition of a policy that anyone with an insurable interest in the property should be listed on the policy. In some cases the mortgagee will waive the need for the mortgagor to carry house owners insurance if the value of the land exceeds the amount of the mortgage balance. In a case like this even the total destruction of any buildings would not affect the ability of the lender to be able to foreclose and recover the full amount of the loan.

Recent research has shown that consumer confusion about the exact cost of the policy could be costing the nation’s house owners millions of pounds each year, with mortgage lenders cashing in on uncertainty over house insurance and therefore exploiting the consumer. The findings of the research indicated that 39% of house owners purchased their house and/or contents insurance through their mortgage provider at more cost and didn’t consult alternative sources, which could have offered a better deal.

House Contents insurance

Contents insurance covers your possessions in on your property e.g. furniture Cover is provided either on a ‘like for like’ or a ‘new for old’ basis. A like for like basis will provide you with compensation equivalent to the value of your insured item prior to when it was damaged whereas new for old will provide you with monetary compensation which would allow you to replace the damaged item with an equivalent new item.

Similarly to building insurance, contents insurance offers protection against various perils including: Flood & Fire damage, Burglaries & Vandalism by a 3^rd party.

It is pivotal to avoid under insuring the contents of your house. Under insuring can have drastic consequences because if, for example, the value of the contents of your house is £50,000 and you insured for only £25,000 then you will effectively reduced the value of your contents by up to 50%. So if you needed a new carpet valued at £3,000, your insurer would only pay £1,500. Therefore it is essential to fully calculate the value of your contents.

The best way to do this is to create a checklist of absolutely everything you have in and around your house including gifts and house made products. Try to include an approximate date when the items were bought, any receipts you might have and also the serial numbers of technological equipment. Despite being a strenuous process, if the worse was to happen then it will make recouping your losses far easier and quicker

Also remember about the limit insurers could place on individual items, as it could be lower than some of your possessions. If this is the case you have three options:

1. Notify the company of specific items
2. Break the item down into components of lower value where possible, for example: A bed can be broken up into a mattress, bed frame, headboard and bed linen.
3. Take out specialist insurance.

Contents insurance – bolt ons

There are a number of bolt-ons available to a supplement a basic contents insurance policy. Including:

• New for old replacement cover – This replaces items with equivalent new versions at today’s prices (this is recommended for lots of technology products).

• All risks cover – Includes items likely to be taken outside your house. These items are usually specified individually, such as Jewelery, Cameras, Laptops etc.

• Legal cover – This pays for legal costs involved in making your claims. There are a number of different policies available including:

  1. Compensation for injuries – If you are in an accident that’s not your fault you could claim compensation.

  2. Consumer disputes – Disputes from buying, holding or selling goods.

  3. Disputes with neighbours – Such as new fences, trees blocking light, etc.

• Garden equipment cover – Protects against theft from a garden shed.

• Accidental cover – This includes cover for damages occurred when decorating your house (This is also available in building insurance).

It is of paramount importance to examine and re-examine precisely what your insurance policy covers. All levels of cover should include compensation against theft and fire. However, it could be important to make sure you are protected in the eventuality of storms, frozen pipes, subsidence and more depending on your geographical and location. Also, if you have extended or plan to extend your house make sure your policy reflects the changes you make as you may need to insure any extra land that is included in the extension.

Buildings & Contents insurance combined

There could be discounts available for taking both policies out with the same insurer and it can certainly save time. However, just because an insurer is good for buildings insurance, it does not mean that they will automatically be the best for contents insurance and vice-versa. Therefore it is vital to scour the market, compare and negotiate quotes from a range of insurers for both and not succumb to the discounts offered as the cheapest is not always the best.

When evaluating the quote for your policy, it is important to note that the price you receive is dependent on your circumstances and the amount of cover you need. Therefore by implementing the tips below you can drastically reduce the cost without reducing the cover available..

How to get the best deal on house insurance

Reduce the risk of damage/theft

Arguably the best to reduce your house insurance premium is to cut the risk of having to make a claim. There are numerous ways this can be achieved:

• Security measures to reduce theft risk – Fit a burglar alarm, change and increase the number of locks, join a neighbourhood watch scheme, install security lighting, etc.

• Reduce fire risk – Fit and maintain smoke alarms, Have a fire extinguisher in the kitchen.

• Increase the standard policy excess – If you are willing to cover more of the cost of any claim then you will reduce your house insurance premium.

• No claims – The fewer the claims, the lower your premium. Some companies offer up to 40% no claims discount on the premium .

Do your research – House Insurance comparison sites

The best way to cut the cost of your house insurance is to get the best deal available for you. To do this, you will need to shop around. Using the price comparison tool at asrecommended.com will save you time, effort and money. Just fill out the form and it will compare prices from more than 60 different house insurance companies to help you find the cheapest house insurance quote available.

The reputation of the insurer is also a determining factor of who to take out cover with. Consult with friends, family and neighbours as they will be aware of problems that may occur with the house.

House insurance exclusions

It is crucial to be aware of elements that might threaten your claim. These can include:

1. Falsified information.
2. Lack of maintenance – negligibility is unlikely to be covered.
3. Failure to install security systems.
4. Failure to carry out repair work on previous claims.
   

Also bear in mind that it can sometimes make more sense to pay for relatively inexpensive repairs yourself than make claims on your insurance e.g. a cracked window. This will allow you to build up your no claims bonus.