Insuring Your Property Effectively
Whether a property owner or a homeowner, protecting your property from damage and the worst-case scenarios is one of the most important undertakings you will ever take. Luckily though there is a wide range of different insurances for specific cover purposes including contents, buildings and higher value policies for items such as artwork or high value cars (source: SPF Private Clients) to ensure that arranged properly, you will never be caught out.
This applies (to different extents) for both residential and commercial tenants as whilst their landlord may insure the building, the contents inside will be their responsibility. In addition, the insurances and protections you arrange for your property are also closely related to large commitments such as mortgages and some subsequent loans, so it is important to be fully covered.
Additionally, it may be the case that having saved up or perhaps taken out a guarantor loan or other personal loan, you have been able to pay for larger than normal refurbishment such as a loft conversion or downstairs extension. In such cases you will likely need to make your buildings insurance provider aware, as the status and size of the property will be different to what they initially agreed to insure.
Insuring Your Property
There are numerous insurances to take into account, with each having its own merits and considerations. Moreover, some insurance policies for properties are more pressing than others. For example, it is not possible to get a mainstream mortgage without valid buildings insurance and certain items may invalidate the buildings cover if present within the property, if they do not have specific insurance(s) attached. Other insurances such as content cover are not necessarily required but are usually strongly recommended.
Buildings Insurance Cover
Buildings insurance policies cover the actual building of the property, i.e. its physical structure and the components holding it together. This cover is designed to cover the building against total destruction or irreparable damages such as fires and major structural damage caused by impacts. Buildings insurance also covers internal damages to the building such as leaks, collapsed ceilings and damage to elements of the property such as the floor and similar.
It is important to check the exact components that are covered by a buildings insurance policy as some will cover fixtures and fittings as well as the structure, whereas other will not. Fixtures and fittings include things like fitted kitchens and bathrooms. Therefore, if a policy states it covers one thing and not another, as the insured party it is important to know this from the outset.
In general, buildings insurance will cover the property and the owner or residents against:
- Fire and Smoke Damage
- Water Damage
- Collision-Related Damage
for properties that are in areas of specific risks, such as lower-lying areas that are more susceptible to flooding, specific cover (in these cases flood insurance) will be required as the risks may be deemed too high for that particular factor by the underwriters of mainstream buildings insurers.
Contents insurance differs from buildings insurance as it covers the actual ‘contents’ of a building or property as opposed to the building or property itself. For example, the buildings insurance will cover the actual structure and the contents insurance will cover the possessions of value; items such as electronics, jewellery (up to a certain value), clothing and furniture. Items of higher and particular value such as artwork or jewellery over the threshold of the insurer’s cover amount will need their own appraisals and insurance from more specialised and specific insurance companies.
These policies are strongly recommended as they cover damage and loss of most items. For example, if a property is burgled and an expensive watch is stolen, but was under the content insurance policy, the insurer will pay out the value amount of the stolen item. Alternatively, many insurers will source the same or an equivalent product as a replacement.
This also applies should the property for example fall victim to a fire or flood. In these cases, the insurer will likely send an expert assessor to undertake an appraisal and evaluation to assess what is damaged beyond repair and what can be salvaged. Then, they will help you replace the items damaged beyond repair and may go as far as helping you get repaired the other items covered by the content insurance policy with them.
Some policies also provide international cover (although it is important to check this in detail as some higher risk countries are likely to not be included). This means that should an item be lost, stolen or damaged beyond repair in a foreign country included in their policy, they will act to replace the item accordingly. It is important to note though that content insurance will, in most cases not cover all kinds of loss or damage such as:
- Wear and Tear
- The Structure, Fittings and Fixtures of the Property
- Damage to Computers, Phones and Tablets due to Viruses