Money

The dummies’ guide to home insurance

It's not as complicated as it seems, promise.

By BTYB Budget Direct
It makes sense for anyone who owns a home to have home insurance.
We know what you're thinking, and what you may be too embarrassed to ask: 'Sure that's all well and good... but what exactly will home insurance do for me? What does home insurance cover and what should I be looking for? Do I need contents AND home insurance?
And the work doesn't stop once you've selected your insurance. It's important to remember life and circumstances change, which means your home and contents insurance needs could change, so it's a good idea to review your insurance at renewal.
DON'T FEAR! WE'RE HERE TO HELP!
An expert from the Get More with Budget Direct team suggests we take the time to put a proper home and contents inventory together for any claims. This will save you time when updating your policy and later, could save you money.
"Unforeseen circumstances such as break-ins or home disasters like house fires will all require putting a call through to your insurance company. This task may seem unnecessary, but many insurance companies require that an inventory of your valuables be submitted with any insurance claim," the team explains.
Now, let's start at the very beginning with a few first-time buyer tips.
Read this before you make your next move.

What are premiums and how are they calculated?

A premium is an amount you pay for your insurance coverage. You can usually choose to pay by regular instalments or an annual lump sum.
The amount you pay will be based on the likelihood you will claim on your insurance policy. It's calculated through factors such as who you are covered by and what level of coverage you have decided on, as well as the level of risk your property has been assessed to have.
There are ways you can reduce your premium such as increasing your excess, however you need to be comfortable about paying that amount of excess in the event of a claim.

There are different types of home insurance

Yep, there are different types of home insurance.
You have the choice of home and contents insurance; building insurance or contents insurance.
Don't feel overwhelmed; we're going to break it down for you.
While all these types of home insurance cover various kinds of damage, destruction and loss to your home and belongings, the specifics will vary depending on which cover you decide to go with.
We've filled out the guide below using the information available from Budget Direct, winners of the Money Magazine Insurer of the Year award for 2017. You get more with Budget Direct, so it's a great place to start for first- timers.
This one is for homeowners and landlords.
It's a combination of building insurance and contents insurance.
It means your home and most of your stuff will be covered in the event of damage or loss like one of the following:
  • Storm and rainwater (flood cover is optional)
  • Escape of liquid (e.g. burst pipe)
  • Fire, lightning, explosion, and earthquake
  • Impact (e.g. fallen tree)
  • Theft, attempted theft, and malicious damage
  • Accidental breakage (glass, ceramic and sanitary fixtures only)
Building insurance covers the cost of repairing or replacing your home (residential building) if it’s damaged or destroyed by events like a fire, storm, or impact, but not the loss of the contents.
It's not just your home either; you'll be covered for other structures on your property like your garage and inground swimming pool.
This type of insurance is designed for both homeowners, landlords and renters alike. If you own stuff, it pays to have contents insurance.
Contents insurance covers contents in your home in the case of loss or damage from fire, storm, theft, and more.
'Contents' or stuff is classified as:
  • furniture and furnishings
  • computers and electrical appliances
  • kitchenware
  • clothing and shoes
  • personal effects like jewellery, sunglasses and cameras
  • carpets – loose and fitted
  • Internal blinds, curtains and window coverings.

How to compare the home insurance market:

With so many different options out there, how can you know what home insurance is best for you?
A quick google search of the phrase, compare the market will allow you to compare information from a number of providers and enable you to get a quote.
If you're thinking about moving from one company to another, many sites offer internal tools to help you find out if you're getting a good deal.
If you're thinking about moving from one company to another, many insurers such as Budget Direct offer tools to help you find out if you're getting a good deal.
So there you go, it's nowhere near near as hard as you thought, right?
Get in contact for a quote now.
Disclaimer: The information in this blog is general and personal circumstances will vary.
Brought to you by Budget Direct