As the name suggests, it combines the two main elements of home insurance – contents and buildings – and these can also be arranged and sold separately if preferred. If it suits your needs, a combined policy can have significant advantages over arranging individual elements of cover. Price is often the major factor – if you need both types of insurance then a joint policy is likely to be the most cost-effective option. It’s also likely to be more convenient to arrange everything in one go, and there will probably be less paperwork to take care of.
“This firm is much more than a mortgage broker, they have reviewed all our protection polices including the policies we have taken out for our commercial premises.”
What does buildings and contents insurance cover?
The buildings insurance part of the policy offers cover for your home’s structure and its permanent fixtures. If you own the property outright then the choice of whether to take out buildings insurance is down to you, but you should consider the value of your home, whether you could afford to lose such a valuable asset, and whether you could put another roof over your head.If you have a mortgage on your property it is likely that the mortgage provider will insist that you have buildings cover as a condition of the loan, and leaseholder terms may also demand this. In obtaining a quote, you will be asked the rebuild value of your home. This should be found on your mortgage agreement or on the deeds of your house, but for more information try using the calculator supplied by the Association of British Insurers (ABI)† or visiting the Building Cost Information Service.
The contents insurance element of the policy offers financial protection against accidents, thefts or loss that can affect your personal possessions and other valuables.Such cover is optional, but you should consider how important such items are to you and whether you could afford to replace them should they be lost.In seeking a quote you will be asked to assess the value of your contents. While this may be a laborious task, the best way is simply to go through your property room by room, making a list of your possessions and their value.
Insurers usually set a maximum limit for individual items, and this is likely to be in the region of £1,500. If you have items worth more than this – perhaps jewellery or expensive electrical equipment – you will need to list them separately on your policy.You should always check your policy’s terms and conditions for full details of what is covered and for any exclusions.
Are there any advantages to separating buildings and contents insurance?
Ensure that you need both buildings and contents cover before considering a combined policy.Buildings insurance will not usually be of concern to tenants, but it is likely that they will want to consider cover for their contents.Landlords, for example, may not need contents insurance if they let their property unfurnished or part-furnished, although they should check their buildings policy carefully to see exactly what is covered.As ever, it is advisable to search the market for the best deal to suit your needs and to read the terms and conditions before buying a policy. However, there are some quick ways to save on your contents insurance before you start to compare buildings and contents insurance: Fitting a burglar alarm, joining local Neighbourhood Watch schemes, security lighting and other measures to secure your home Fitting a NACOSS alarm could earn you a discount of up to 7.5% Install a smoke alarm Increasing the excess on your policy – if you are happy to cover more of the cost of the claim your premiums will be lowered No claims discounts – the less you claim, the lower your premiums will be. Some companies offer a no claims discount, but check with them before you buy cover. Shopping around and comparing buildings and contents policies.
Do I have to take out buildings and contents insurance?
Unlike car insurance, you are not breaking the law if you don’t have building and contents insurance. However, most mortgage providers will insist that you have buildings insurance before they will lend you any money, as your home is used as collateral in the event that you can’t keep up repayment. Beware of mortgage providers selling you expensive insurance policies alongside your mortgage – compare buildings and contents insurance and get a cheaper quote elsewhere if you can, but you’ll need to weigh up the cost of any exit fee, if applicable, against the money you’ll save.
Circumstances that could invalidate your home insurance policy
There are a number of other changes to your home situation that could invalidate your contents and buildings insurance policy. For instance, if you make significant structural home improvements such as knocking down a wall, installing a loft conversion or putting an extension on the house, this could change the terms of your policy.
Not informing your insurer will cause problems for you should you need to make a claim later. Similarly, you may need to inform your insurer if you live within very close proximity to a tall tree or flood-prone area, or have parts of your home made from non-standard materials.