Nine insurance tips for first time homebuyers

Congratulations, you’re now a homeowner. But, before you pick out your new wallpaper and measure up for sofas, it’s important to make sure you have the right insurance to suit you. While it’s not the most fun part of buying a house, it will protect your property and possessions should the unexpected happen.

1. Lay the right foundations

Buildings insurance can cover the cost of rebuilding or repairing your home if it is damaged. It covers the bricks and mortar along with any fixtures and fittings (such as a fitted kitchen or bathroom suite) in the property.  Most mortgage lenders will insist you have buildings insurance in place before exchanging contracts so it’s a crucial part of the home-buying process. 

When taking out buildings insurance many new homebuyers assume they need to insure their property for the amount they paid for it. But, the good news is that it could be a lot less. That’s because buildings insurance is there to cover the cost of rebuilding your home from scratch, which would usually cost less than the market value of the property.

If you work out the correct rebuild figure and insure for this rather than the total amount you’ve paid for your home, you could reduce your premiums. To find out the rebuild cost of your new home, check your RICS HomeBuyer Report if you have one, or alternatively you can use a free online rebuild calculator.

2. Protect your possessions

Searching for insurance online

The contents in your home aren’t covered by your buildings insurance policy, so you’ll either need to get a combined buildings and contents home insurance policy or a separate contents only insurance policy to protect your possessions against things such as theft, fire and flood.  

A good way of thinking about what is covered by a contents insurance policy is to imagine turning your house upside down - anything that would fall out is normally classed as contents. It covers the kind of things that you would take with you if you were to move house such as furniture, clothes and electricals.

Don’t make any assumptions. You’re unlikely to be automatically covered in full for accidental damage, and if you’re lucky enough to own something really special, like a diamond ring, you should consider protecting it for loss outside of the home. Both accidental cover and out of home cover are usually optional add-ons to your home insurance policy.

3. Get the numbers right

It’s important to calculate the value of your contents accurately to ensure you’re properly covered. The devil is definitely in the detail. Consider everything from curtains, cushions, clothes and kitchen gadgets – you’ll be surprised at how much it all adds up.

A good way to work out the value of your contents is to methodically work your way around your home, making a list of each and every belonging. Once you’ve made a list for each room, you’ll need to add up what it would cost to replace every item at today’s prices. Check receipts or look things up online if you’re not sure. There’s usually a single item value limit in place on contents policies of around £1,500. So if you have one item worth more than this, speak to your insurer about your options.

You can use our online contents calculator to easily get an overall value for the contents of your home.

4. Make it affordable

A row of houses

An ‘excess’ on your buildings and / or contents insurance means that you’ll pay a minimum amount every time you make a claim on the insurance policy. For example, if you choose a £50 excess and make a claim for £400, you’ll receive a maximum of £350 from your insurer.

It’s worth knowing that many policies automatically include a compulsory excess which applies in addition to any voluntary excess that you choose.

It can be tempting to choose a high voluntary excess as this usually lowers your premium. But think carefully, if you find yourself needing to claim - would you be able to afford the excess?  

It’s also worth considering whether you’d be best opting for a monthly direct debit, or paying annually. Monthly payments might be more convenient, but you could avoid any interest charges if you choose to pay annually. 

5. Plan your holidays

When setting up your home insurance policy you’re likely to be asked if you plan to spend more than 28 consecutive days out of the country. So while your two weeks of sun in Spain is safe, it’s worth considering any plans for extended holidays as this could increase your premiums. If you do decide to pack up and leave for a month, remember to tell your insurer as otherwise any claim while you’re abroad could be invalid.

6. Be safe and secure

Closing a door

You can take some practical steps to lower your premiums by setting up some basic security measures.

These steps are as simple as fitting a professionally maintained burglar alarm and having approved locks on all windows and doors. Remember that if you have these in place and state them in your insurance policy you must use them, otherwise your claim could be invalid.

It’s also worth knowing if there’s a Neighbourhood Watch scheme in your area. If you become a member of your local group, you may be able to lower your premiums as well as increase the security of your home and local community.

7. Prove your worth

If you do have to make a claim, you’ll usually be asked for proof that you own the items your claiming for. Keep all receipts and ensure you have access to debit / credit card statements so you have proof of purchase.

Of course, paper copies of receipts can go astray, or even be damaged along with your belongings, so it’s a good idea to back up your high value purchases by taking a photo of the possession and the corresponding receipt, and then store these in a secure place. Storing them on email or on a secure cloud storage facility is an easy way to do this. If they’re only saved on a camera or phone, there’s a risk they could be lost along with your other possessions.

8. Use a reputable removal company

Moving removal boxes

It’ll help things go smoothly on the big day and can help to put your mind at ease. A decent removal company should have insurance to cover any mishaps that may happen in your move, as your home insurance policy won’t.

Research your removal company thoroughly, ask for recommendations from family and friends, and make sure the company you choose are members of the British Association of Removers (BAR). 

9. Shop around

Always shop around for the best deal, and don’t automatically go with your mortgage lender’s suggestion. After all, every pound you save can be put towards paying utility bills, or more excitingly, new furniture! And remember that buildings insurance doesn’t protect your contents, but it may be cheaper to combine buildings and contents home insurance together in one single policy.

Home insurance policy details differ with each insurer, so be sure to consult your own policy documentation for full details of the cover, excesses, terms and conditions that apply.

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