If you have a mortgage, your lender will insist that your property (and their security) is protected by buildings insurance. It usually pays out if your property is destroyed by fire, floods or subsidence (although you will need to check if you live on a flood plain, for example). Damage to fixed fittings such as baths and kitchens are often included, as well as sheds, greenhouses and garages.
You might be offered buildings insurance when you take out your mortgage, but you don’t have to take what’s on offer. Use the key policy information to shop around and get the best deal for you.
If you purchase a leasehold property (such as a flat in a block of flats) the freeholder may have arranged buildings insurance for the whole block, in which case you may not need your own buildings policy.
What isn’t covered?
Your cover is based on what your home would cost to rebuild. You can check whether you have enough buildings insurance through the Building Cost Information Service (BCIS) website. It has an online tool to help you calculate the sum you should insure your building(s) for, in case your home has to be entirely rebuilt.
You need to tell your insurer if you extend your property, for example with a loft conversion or conservatory. Your belongings are not covered – these need to be covered separately with contents insurance – see Contents insurance.
Keeping costs down
As always it pays to shop around but don’t compromise quality for the sake of a few pounds. You may find that you get a better deal if you buy buildings and contents insurance together. Most policies have a standard excess charge which means you agree to pay the first part of any claim, for example the first £50 or £100. If you agree to pay a higher excess you might get a cheaper policy. Always compare what’s covered by a policy, not just the price – the key policy information will help you do this. Some might be cheaper than others, but they may not offer the same level of protection.
CONTENTS INSURANCE -What’s it for?
It covers the loss of or damage to the contents of your home. This includes your furniture, electrical goods and other items within your home. Some policies cover you for items you take outside, for example cameras, jewellery and briefcases. Different policies offer different levels of cover but generally you’ll be covered against theft and fire, and have the option to insure against damage you may cause by accident. It is always vital that you thoroughly read and understand the full policy terms and conditions.
If not already covered by your contents insurance, you may want to consider travel insurance for loss or damage to your personal belongings whilst travelling.
What isn’t covered?
Anything beyond the maximum amount your insurer says they will pay, and it may pay a maximum amount on single articles. You’ll need to specify the value of the contents. Some companies have limits on the value of any one item under the general policy so you’ll need to specify individual items such as expensive jewellery or camera equipment, for example. Your cover may also be affected or cancelled if you leave your home empty for a long period of time, or if you let it out. Damage to the building itself is also not covered; this needs to be covered separately with Buildings insurance – see Buildings insurance.
Keeping costs down
Many insurers will offer discounts if you have a burglar alarm, window locks or if you’re a member of a Neighbourhood Watch scheme. You may also get a deal if you combine contents and buildings insurance.
Most policies have a standard excess charge which means you agree to pay the first part of any claim, for example the first £50 or £100. If you agree to pay a higher excess you might get a cheaper policy.
Always compare what’s covered by a policy, not just the price – the key policy information will help you do this. Some might be cheaper than others, but they may not offer the same level of protection.
Level of cover
Some contents insurance policies offer new for old. This means they’ll replace old damaged appliances and possessions with new ones when you claim.
Bear in mind that your premiums may increase the following year, or the insurance company may refuse to cover you for the same risk if it happens more than twice, for example.
Accident Sickness and Unemployment insurance is the only policy that covers you against losing your income through redundancy.
In the current climate of job uncertainty, knowing that you’ll be able to keep up to date with your bills in the event of redundancy is one less thing to worry about, and having that peace of mind knowing that your family’s welfare and lifestyle can be maintained if you become unemployed due to job cuts, or simply through ill-health can be a weight of one’s mind.
So what does ASU insurance provide me?
ASU insurance is a time-limited insurance product that provides short term assistance in paying your debts, in the event that you are temporarily unable to work.
ASU cover usually starts a month after you stop work, and pays out for a limited period of 12 or 24 months, depending on the policy. As independent advisers we take a whole of market approach to find the cover that’s right for you.
When considering ASU insurance, reading the small print is essential, as there are important differences between the various policies available. It is particularly important to check which health conditions are covered by each policy, and if you have had a particular health issue in the past, to make sure that is included, or, more importantly, that it is not excluded for you.
What is family income benefit (FIB)?
Family income benefit (FIB) is a type of life insurance. Policies run for a set period of time known as the term. If you die within this period, the policy pays out a regular tax-free income until the end of the term. With traditional life insurance a lump sum is paid out on death.
How family income benefit works?
Cover is only for as long as the policy runs. Once the term ends, the cover and any income payments cease.
With level-term life insurance a lump sum is usually paid out in the event of death. This lump sum is the same amount regardless of whether death is in the first or last year of the policy (although some policies run indefinitely).
With FIB, the total amount paid out by the policy depends on when you die. If you die in the early years of the policy, the total pay-out will be more than if you die nearer the end of the term of the policy.
This type of insurance is known as decreasing-term life insurance. Because the total pay-out decreases over time, this insurance is cheaper than an equivalent single lump-sum life insurance policy which runs for the same period.
Why you might want it?
FIB is a cheap and easy way to provide your family with an income rather than a lump sum if you die. If you have a young family, you might want cover to run until your children are grown up. This income could be used to meet everyday expenses or to pay for specific on-going expenses such as school or university fees.
Don’t forget that prices rise over time so you’ll need to factor this in when deciding on the amount of income needed. You may also have other life insurance which will pay out in the event of a death.
Cost
Premiums are based on the amount of cover and how long you want it for, your health, lifestyle (such as whether you smoke or not) and your age. You can opt for a level income or pay more for an income that rises by a set amount each year. Waiver of premium cover is also usually available. This ensures your premiums are met if you’re unable to pay them yourself because you fall ill and are unable to work.
Some policies now offer a critical illness option which means the policy would pay out if the policyholder developed a serious illness such as cancer. However, all extras like this will add to the cost. so, find out the cost of basic cover first.
Policies are often bought on a joint basis which means the income payments are made as soon as one partner dies. But it may be only slightly more expensive to own two individual policies. This is potentially better value as they would offer double the pay-out if both parties died during the policy term.