Different types of insurance as a first-time home buyer

Dannydee333

I am engaged in the process of buying my first home. I hope this goes all the way to completion, but I would like some advice on the types of insurance I should get.

Buildings insurance is already covered in the monthly management fee (it's an apartment) so, I don't need that.

Obviously, I will take out life insurance for the amount of my mortgage loan.

I will also likely take out income protection to cover at least 50/60% of my take-home pay so that if I am made redundant, my mortgage and home-related costs are covered. I usually have a few thousand in savings for a rainy day (although that will probably be flattened by the time this home purchase has gone through and I'll need to build it up again 🫠).

I think contents insurance might also be a good one to have. I believe the basic is like up to 50k minimum, and that would be more than enough.

I'm just not sure about adding the critical illness cover. I know it's just a personal choice but my broker gave me a quote today and the life insurance was only like £7, but with critical illness added on, it went up to £52.

I guess what I'm asking is do people tend to go for all the above? If so, what's the average total you pay per month for all the above? Some of the above?

I got quotes from my mortgage broker, who is obviously affiliated with a certain company, but a quick search on compare the market dot com showed me I could apparently get much better rates than my broker was offering.

Are you happy enough to use comparison sites for your quotes? Do you keep all your insurance with the same company or mix them up?

Any advice or personal experience would be much appreciated.

Also, I imagine it's wise to arrange these before contracts are signed, but how do you arrange them when you're in the early stages of the process and don't yet have a completion date, or should I wait until I have a date?

DullGreyGuy

We have:

• PHI - the full fat version of income protection that will pay 50% of my gross income until my 65th birthday for accident or sickness. It doesn't cover unemployment.
• Life - have two policies, one decreasing to cover the mortgage and a second to provide salary replacement for my wife
• Contents - we have unlimited cover (with some inner limits); people massively under estimate the total value of every single thing they own in their home on a new for old basis. Have seen people insure their contents for £10,000 and been found to have over £50,000 of stuff, consequently they only got 20% of their claim due to the averaging clause in the contract.
• PMI - a bit of a luxury however as a freelancer if I am too ill to work I don't get paid, the PHI will kick in after 6 months but I'd rather be well and getting 100% of my monies rather than 80% odd of net. Wife is also covered as it feels mean to have it such that I see a doctor within a few days and she waits on the NHS for months. 
• Travel - we travel a lot

How much I pay for the above is a little irrelevant because it's based on our lifestyle, health conditions, property etc. 

All of these can be arranged before you even started looking for a property if you wanted... you presumably have rent to pay if not a mortgage and so would still need money if you were to be off sick for 4 years. The one possible exception is Contents where what you own may increase significantly when you go from renting to owning but you can buy that in the gap between exchange and completion if you are nervous or earlier than exchange if you are confident it'll all go through. 

I am not a fan of CI personally, PHI will already replace my salary and I feel that when I am well enough again I probably would want to go back to work. CI isn't a real replacement for PHI (esp if like us there is a sole breadwinner) and don't think an episode with a major illness would make me re-evaluate life and make me want to take it easier which the lump sum may allow. 

Kerreh

Buildings insurance - I live in an apartment so this is included in the service charge, no point giving figures there as entirely dependant on building, location, risks etc (living in an area with extensive flood defences as an example of a factor personal to my building).

Contents insurance (up to £75k cover, aside from some art I own very little as am rather fond of minimalism) @ £52 for the year.

Life insurance - don't have it as no partner/dependants.

Critical illness - made enquiries but my individual circs preclude me from being able to take this out.

So... savings! I have those and just hope for the best

I didn't move in immediately so sorted insurance for when I actually put any contents into the flat.

The one curve ball was car insurance - my insurer cancelled my policy given the change of address (lack of statistics for the apartment, possibly given new postcode allocation? who knows) so that was an expense I hadn't considered having only taken the policy out some six weeks prior and having to argue for a partial refund.