What is budget home insurance?

Budget home insurance is a form of insurance policy which is designed to offer a customer financial protection from theft, fire, flood damage, water damage, vandalism and storm damage to their home. Budget home insurance is offered to customers who need the financial protection should the worst go wrong, on a budget, and is often made up of policies at the bottom end of the market.

Despite being cheaper, these policies still offer adequate cover, and are far better than having no policy at all, a worrying trend that researchers have picked up in the last few years, as the recession has kicked in, and many people have looked for places to make cut backs.

How does budget home insurance work?

Generally, every budget home insurance policy will be broken down into two separate sections, although not every customer will need both sections of it. These two sections are buildings cover, and contents cover.

To make sure you have the right level of cover for you, you need to know what you are responsible for insuring. Generally speaking, although this isn’t true of everyone and is worth double checking, if you own your home, you will need both elements, if you rent your home unfurnished you will just need buildings cover, and a small amount of contents cover to look after the carpets, and if you rent your home you will just need contents cover, as your landlord will be responsible for the structure of the home.

There are exceptions, for instance customers who own a flat, but don’t own the freehold, instead owning through leasehold. These customers will need budget home insurance, but just for the contents of their home, as the freeholder is usually responsible for providing buildings insurance.

All customers can add to their budget home insurance policy, with boiler cover, which provides insurance against any repair or replacement of the boiler system, and appliances warranties, which extends the warranty of all the appliances in the home, usually by at least the extra year they are covered.

Why do I need budget home insurance?

If your home is burnt down, your mortgage will not be burnt down with it. You will need to rebuild that home, find alternate accommodation, and pay for everything that was in the home at the time. With budget buildings insurance, this would all be covered. Without, you could be facing financial difficulties.

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