What is a home insurance policy?
A home insurance policy provides insurance for your home, and is made up of two different parts. The two different parts look after the actual structure of your home, known as buildings insurance, and the contents and materials in your home, known as contents insurance.
A home insurance policy can also have flood risk cover, which looks after your home against flooding if you are in a high risk flood risk area, boiler cover which insures your boiler should something go wrong with it and appliance warranties, which extends the warranties of any appliances you buy and install in your home.
How does a home insurance policy work?
If your home or its contents are damaged by a fire, flood, water damage caused by burst pipes from within your home or a home above, storm damage or vandalism, then the insurance company will pay out to help you rebuild or replace your home and belongings.
Each policy will have a maximum payout, which is far easier to work out for building work, than it is for contents.
It’s important to make sure you choose a policy with a payout that will allow you to replace everything in your home.
Some home insurance policy schemes replace new for old, while others replace with a similar product, based on the depreciative value of the previous product.
Contents home insurance policy
The contents home insurance policy looks after the contents of your home, and this will include your carpets, the contents of your kitchen cupboards, contents of your shed and garage and everything else in your home that isn’t built in. It’s important to accurately estimate the value of these contents, as an insurance company will not pay out more than the maximum payout, just because you underestimated when you took out the policy. Be sure to allow for things acquired throughout the year as well.
Buildings home insurance policy
The buildings home insurance policy part of a home insurance product looks after the structure of the building. It also includes any fences surrounding the property, as well as gates, walls and external structures, like a garage or shed. Not everyone needs this part of the policy, including those who rent a home, and some homeowners who own a leasehold home, which the leaseholder is responsible for insuring the building with.