Common Insurance Policy Guidelines

Regardless of whether you are buying buildings and contents insurance separately or together, you should make sure that both elements are sufficient to meet your needs.

Buildings insurance is the easier of the two to determine. Basically, this must provide a sum assured that is enough to pay for the rebuilding of your home. If you are buying a new home and have a survey done, this figure will usually be indicated in the survey or valuation. If you are unsure whether this is accurate, check with the builder. If a lot of time has passed since you last determined the rebuild cost or you have made significant alterations to the property (such as a loft conversion or an extension), you should ask a reliable builder to estimate the rebuild cost again.

To decide what your minimum sum assured should be, make an inventory checklist of absolutely everything you can think of that you have in and around your home. Then calculate how much it would cost to replace each of the items. This should include things that you have made or built, been given or bought, as they would all need to be replaced if they were stolen or damaged. You should also try to include an approximate date on which the item was purchased and gather together any receipts you may have.

Making this list is an incredibly tedious thing to do, as you will have to slowly go through every room in the house, listing every item and then attributing a replacement value to it. It is worth taking the time to do this properly though, as you will probably be surprised at how high the eventual total is.

Some insurers also put a limit on the amount you can claim for individual items. You should look out for this in policy details, where it will usually be called the Single Item Limit. It may be a lower value than some of your possessions.

Where this is the case, you have three options:

• Negotiate for the full value to be included in the policy.
• Insure the item entirely separately.
• Break the item down into component parts of lower value. Cameras can have the lenses, main body and peripheral equipment insured separately, for instance.

There are a few things that your policy may or may not include cover for:

• Accidental damage
• Away from home cover (possessions, cash and credit cards whilst you are away from your home)
• Cover for frozen food

Make sure your buildings insurance policy starts from the day that you sign the contract, not from when you move in. If you do not have buildings insurance and the house is struck by lightning in between the time you exchange contracts and move in, it will be you who is liable.

You should review your buildings and contents insurance fairly frequently, and make sure that it is kept up to date with any major purchases or alterations to your home. If you fail to inform your insurance company of any building work you have done or expensive valuables that you buy after you take out the initial policy, you may struggle to recoup any money when you come to make a claim.