Buildings and Contents Question

eddddy

It's probably worth adding that if you are underinsured by 50%, some insurers will pay 50% of a claim...

...but there are also some who will cancel your policy and return your premium, and refuse to pay the claim, if you are significantly underinsured.

alchemist.1

eddddy wrote: »

It's probably worth adding that if you are underinsured by 50%, some insurers will pay 50% of a claim...

...but there are also some who will cancel your policy and return your premium, and refuse to pay the claim, if you are significantly underinsured.

To be fair, I have never had contents insurance and doubt i ever will. More curiosity than anything else.

G_M

It's more complex than that.

If you take out insurance for less than the actual value (eg you have £50K's worth of contents but only insure for £25K), then you will only receive 50% of any claim.

So if a burglar steals your £2000 laptop, you will only get back £1000 (because you have only insured 50% of your contents).

alchemist.1 wrote: »

So if you declare you have 25k worth of contents (including the £2000 laptop), do you get the 2000 back or is it still the 1000?

Errrr..... is that not exactly what I just said?

dacouch

G_M wrote: »

It's more complex than that.

If you take out insurance for less than the actual value (eg you have £50K's worth of contents but only insure for £25K), then you will only receive 50% of any claim.

So if a burglar steals your £2000 laptop, you will only get back £1000 (because you have only insured 50% of your contents).

It will not affect your buildings insurance which is a separate policy legally, even if purchased together, though the same principle applies - if you insure your building for £200,000 but after a fire it costs £400,000 to clear the land and rebuild the property, then you'll only get £200,000 and similarly if a burglar causes £500 of damage kicking in your front door, you'll only get £250 as you under-insured by 50%.

(ignoring any excess of course).

You do not need to insure your neighbour's contents. Or building.

Every policy I've ever seen includes cover for legal liability (usually £2m or more), so if your neighbour (or their insurer) sued you for starting a fire which damaged their stuff, your legal liability cover would kick in.

Use comparison sites and shop around. You do not have to use the mortgage lender's insurance. Or the bank's. Or the adviser's.

IS the correct answer regarding under insurance regarding the contents.

OP the bank's adviser is miss informing you and should not be selling general insurance.

The situation regarding Buildings Insurance for a Semi or even a Terrace is that your building sum insured should reflect the cost of rebuilding your own property only. The rebuilding cost will reflect the additional costs of a property that is joined eg that shoring up may be required.

If the a fire starts in your own home and also damages a neighboors home AND you're found legally liable for it then a separate part of the policy eg the Liability section (Which typically provides cover up to £2m would cover their damages claim.

It's fairly unusual for a neighbooring property to be able to claim for their damage against a neighboor for say a fire as the neighboor would need to prove you were negligent eg the risk of the fire was reasonably predictable and that you did not take steps to prevent it.