Is your insurance as safe as you think?

For most of us, price is a major factor in the decisions we make on our insurance policies and with dozens of insurance providers out there it's never been easier to find a cheap home insurance policy that covers the basics.

But beware – it's essential to check what's covered by your policy to make sure that you aren't left significantly out of pocket if something goes wrong.

For example, 1 in 3 get burgled and yet estimates show that over 20% of all household goods are not covered by your home insurance; equally accidents such as flood damage are increasingly common – the question is, are your home and possessions covered?

Building insurance:

What does your policy cover?

A standard policy should cover: flood and storm damage; fire, smoke and explosions; subsidence and third party damage.

Does your policy cover the market value of your property or full rebuilding costs?

The market value of your home could be considerably lower than the rebuilding costs – especially in the case of listed buildings. English Heritage require that if more than 40% of the historic structure of a property has survived you need to restore the whole property – given the building restrictions on listed buildings, that could be very expensive.

Are accommodation costs included if your home is uninhabitable?

If the worst happens and your home is uninhabitable, do you really want to have the additional stress of paying for rented accommodation?
Home contents

If you are a tenant does your landlord have contents insurance?

By law, landlords are required to take out building insurance.However there is no such requirement for home contents insurance and while it may be worth asking your landlord to find out whether there is a policy in place – it is certainly worth ensuring that your are covered by taking out your own policy.

What is the replacement policy?

The most basic level of cover is indemnity insurance, which replaces like for like – if your TV is 3 years old you can claim for the value of a 3-year old TV. Some insurance policies replace new for old, so regardless of the age you will get a new item.

Are portable items covered by the policy beyond your front door?

Some policies cover any items that you take away from home such as watches, jewellery – think about how much the contents of your handbag, or your car etc are worth, particularly if you use a laptop.

Is your garden covered?

Many people have a great deal of money invested in their gardens from expensive plants and features to gardening equipment stored in the shed – make sure your policy covers this area.

Make sure you insure for the right value

One of the major mistakes people make with their home insurance policy is to underinsure - write a checklist of every item in your home to ensure you have insured for the right amount. You also need to ensure high value items are covered – most policies set a maximum value on individual items.

Finally, keep up to date – the value of your possessions could have increased dramatically in even a short period of time – make sure your policy reflects new items you buy.

What security systems do you have installed?

Many insurers legitimately reject claims on the basis that the security measures required by the policy have not been met – it is up to the consumer to read the terms of the policy and make sure that they comply with any prerequisites.

One final piece of advice is: NEVER ASSUME THAT ITEMS ARE COVERED – if you are unsure, always check your policy.
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