How much home insurance should i pay?

longwalks1

never really looked into home insurance much (live in a flat currently, and buildings is covered by my ground rent/service charge) and lived a very minimal life for a while, and am currently paying £12 a month contents with LloydsTSB.

am soon to be moving in with my partner, 4 bed semi 1930's build, with drive and 3 sheds in large back garden. How much should i expect to pay in Essex (quiet village location)? My mortgage advisor gave me a quote of £55 a month (I'm guessing he'll get a percentage of that for pushing it), just it seemed a lot? I want to cover everything, even for things like leaks from pipes etc, what else should i look for?

Been told to go for 'unlimited cover' as some insurers wont pay out anything on a £20k claim even if you have £15k of cover, claiming you were under-insured

Any help/advice/tips would be greatly appreciated

nidO

£55 a month for buildings and contents cover is absurdly expensive.

As a comparison, my combined buildings + contents premium with unlimited rebuild cover, £60k of contents cover, and various bells and whistles such as accidental damage, some expensive personal possessions in and out of the home, is £185 annually.

Even the £12/month you're paying now for contents only is pretty expensive, with a competitive insurer you shouldn't be looking at paying a great deal more than that for combined buildings + contents (though YMMV paying monthly rather than annually with how much extra insurers charge for that, I pay mine annually).

OnanTheBarbarian

Your circumstances are your own, so asking for guides from other people will only cause confusion.

£55 a month for contents cover sounds ridiculous though.

I just took out contents cover for £65k of cover with £5k personal possessions away from home, accidental damage cover etc for a 2 bed detatched bungalow with minimal security for £10 a month.

But, just make sure the cover is what you need, rather than being sold purely on price. Check cover and read the T&C's before taking a policy out.

Cover offered via the price comparison sites can be a little generic and relies on lots of assumptions in order to reduce the amount of questions asked for a quote. This can be ok for mainstream cover, but if your circumstances are beyond the norm then a high st broker (not Swinton) may be a better bet for getting tailored and suitable cover.

longwalks1

Ahh marvellous nidO, many thanks. Im guessing his hard sell was working as he tempted me with the mortgage offer
Ive just run a quick check on a price comparison website (one with an annoying fat opera singer on its adverts) and quotes started coming in at about £180 a year upwards, so pretty close to yours (at that price i will pay it annually too)

Are there any things to look out for, or specify or any 'add-ons' to take out? I dont have a cycle or expensive jewellery or take a laptop away with me

Thanks again

InsideInsurance

britishboy wrote: »

Been told to go for 'unlimited cover' as some insurers wont pay out anything on a £20k claim even if you have £15k of cover, claiming you were under-insured

Why "claiming"?

When you buy contents insurance you must declare the total value of EVERYTHING that will be in your home if you were to go out and buy them all brand new today. If you have done this and said £15,000 how can you then put in a claim 2 days later for £20,000?

There is no "claiming" about it, you clearly would be under insured. Its also exceptionally rare for someone to lose absolutely everything as most the time we do at least have the clothes on our backs and at least some things survive fires and floods etc so if your claim was for £20k then really the total of your goods was even more than that.

If you'd get anything depends on if they believed you accidentally under declared your goods or intentionally attempted to defraud them. If its fraud then you may not get anything.

If its accepted it was accidental then at best you'd get the £15k you'd insured things for but many insurers have an averaging clause such that any claims in cases of underinsurance are reduced by the level of under insurance. So if your total earthly possessions are deemed to be worth £25,000, you put in a claim for £20,000 but you had only declared the value as £15,000 then they'd note you'd only insured 60% of your possessions and so would only pay out 60% of the limit

Blanket/ unlimited policies can help save you from the hassle of adding up the values of things, keep track of the movements in prices of sofas or cutlery etc but even unlimited policies do tend to have some inner limits, eg jewelry, which are specified and you do still need to check that these are appropriate. Again that would be for ALL items that meet that definition and not just the ones you are bothered about losing etc

ScoobySnacks79_2

This always strikes me as a little unfair. If you have insured the contents for £15k, then obviously you will not be able to claim £20k, but how does insuring a lower value actually adversely affect the insurer? The absolute upper limit of liability is the amount declared for insurance. If the actual value of the contents are higher then there is no way you could expect them to pay more than the limit, so I don't see how "under insuring" can be punished in that way.

InsideInsurance

ScoobySnacks79 wrote: »

This always strikes me as a little unfair. If you have insured the contents for £15k, then obviously you will not be able to claim £20k, but how does insuring a lower value actually adversely affect the insurer? The absolute upper limit of liability is the amount declared for insurance. If the actual value of the contents are higher then there is no way you could expect them to pay more than the limit, so I don't see how "under insuring" can be punished in that way.

Because the risk the property represents changes. If you have a house full of £50k's worth of high tech AV equipment that can be seen from the street through your window you are much more of a target for a theft even if you have only declared a £15k limit than if you actually have only £15k of stuff.

Similarly if you are a victim of a theft its going to be much easier for the theif to get £15k of stuff out of your house -v- if £15k is the total value of every single item in the house including your dirty underwear etc.

So both claim frequency increases and average claim amount.

Similarly with flood/ fire etc, average claim amount goes up as ground floor alone has well over your limit but a similar 2 floor building with only 15k of stuff in it will never lose all 15k from a moderate flood as a good proportion of the items are upstairs

nidO

ScoobySnacks79 wrote: »

but how does insuring a lower value actually adversely affect the insurer?

I would assume this comes down to the probability of the value of your stuff being destroyed as a percentage of all of it, rather than just a fixed figure.

By this I mean that, as InsideInsurance mentioned, when a fire/flood/whatever happens the chances are that not everything in your house is going to be totally destroyed.

So, lets say that insurance companies know that for an average house fire, 50% (totally random example) of insured stuff is destroyed and needs claiming.

When you take out your insurance on £50k of stuff, your insurer therefore knows that on average if your house burns down you'll be claiming for 50% of it, ie £25k and so builds their premiums to reflect that - ie you're insured for £50k but on average that type of claim is more like half that, so you're getting a cheaper premium than you would if the insurer was assuming every fire would equal a claim for 100% of your insured value.

So, if you have £100k of stuff but still only get insurance for £50k and your house burns down, you would be (on average) claiming for that full £50k rather than the normal average of £25k, while still having paid the same premium as above.
If the insurers went along with this it would just incite everyone to underinsure themselves on the basis that the realistic chances of absolutely everything they own being destroyed is pretty remote, so why not just insure (say) 80% of it and get lower premiums?

smifffy1989

My buildings and contents policy is £180 a year.

I know people who pay £120, and there are a number of deals on the cashback sites that would probably see you pay less!

*Scarlett

britishboy - obviously check the comparison sites and also insurers directly eg direct line

Make sure that you are comfortable with the excess fees and check exactly what reduction in premium you will get for an higher excess.

Make sure that you don't under insure - some insurers provide a contents value calculator to give you an idea. Many mainstream insurers offer £50k as standard but some will give £75k.

Many insurers give a blanket buildings cover £500k - £1m.

You also mention that you want to be covered for burst pipes. You may want to consider a home emergency cover either with your home policy or separately. Your b&c policy will cover you for the water damage but not usually for the repair of a burst pipe unless there is some sort of emergency cover built into the policy as standard.

Most companies will cover outbuildings ie your 3 sheds for rebuild / replacement and the contents. Check the policy limits for these. Also there may be conditions that the shed is on a concrete / slab base.



You can consider unlimited cover if it is cheaper but if you do not need it way pay more?