A property is likely to be the biggest investment a person makes in their entire life, so ensuring that it is properly protected is of high importance.
Why it is important
While it can sometimes feel like you are spending money without receiving anything tangible in return, purchasing home insurance is actually an important investment. For most people, a house represents the vast majority of personal possessions.
Purchasing house insurance is a way of protecting your assets. If your house is damaged in any way – for example by fire or flood – then, concordant with the terms of your policy, your insurance will cover the cost of repairing these damages. In the unfortunate event that your whole house is irreparable, the cover paid out with your house insurance policy will enable you to find a new home, and/or pay off the mortgage on your previous house.
Without house insurance in place, the house owner would have to fund all these repairs and repayments from their own pocket, turning an already unfortunate event into a more significant blow. By investing in home insurance now, you could save yourself many thousands of pounds in the future.
What exactly is home insurance
House insurance can usually be separated into two components: buildings insurance and contents insurance. Buildings insurance is what protects your house itself, from damage caused by unforeseen events, such as fires, floods, etc. Each policy will vary slightly on what is included in the cover, so be sure to check the details carefully.
Contents insurance covers the personal belongings contained within your home. You can choose whether to take out buildings or contents insurance or both, but a comprehensive cover will offer you greater protection.
Consider whether, in case of an accident, you could afford to replace the entire contents of your home: clothes, electronics, furniture, leisure equipment, and all your other personal possessions.
When you take into account the total value of your house and all its contents, the comparative cost of protecting them with home insurance ought to present a worthwhile investment.
Why you should regularly review your policy
It is important to manage your house insurance policy carefully. Notify the policy provider of any changes that might affect your policy, such as building extensions or implementation of security features.
Check carefully that your house is covered to meet your personal requirements; not all policies offer accidental damage as standard, for example. Most insurance policies are valid for one year, so make sure you renew your policy at the end of the term to continue to receive cover.