Understanding Home Insurance
It can be sometimes be difficult to understand the terminology and workings behind insurance, but home owners insurance doesn’t need to be complicated.
Insurance all comes down to ‘risk’. Whatever the insurance is based on, in this case its your home, the provider has to assess the various risks that can occur, and provide you with a scheme to protect you against finances. Simply put, they take the ‘risk’ of paying off you, for a small premium and annual renewal fee.
The costs therefore, are directly related to the risk. The more you insure the more risk you are having covered. Likewise, various influences can alter the risk. House prices and the area you live in, for example, all influence the costs of repair or replacement after an incident, as well as the likelihood of that incident occurring in the first place.
Contents and Building Cover
Home insurance is typically made up of two key areas, contents and building cover. Contents, as the name suggests, protects possessions inside the house. Any valuables that you could not, or don’t wish to, cover the costs of repaying can be covered.
The more you cover will raise the cost, of course, but it’s a small price to pay to cover items that are important, from TV’s to kitchen facilities and jewellery, nearly anything can be covered, unless there’s a more suitable alternative such as Car insurance.
Likewise, building cover focuses on the actual building. The physical structure can often be worn down. This cover helps preserve the original value by repairing when it things go wrong. Accidental cover is often included, which covers basics such as water damage, but can often be improved for a small additional cost.
Despite this, home insurance doesn’t need to be expensive. First of all, you can combine the two traditional elements of home insurance, buildings insurance and contents cover, into one combined policy. With the likes of LV House insurance, you can combine the two into one cheaper policy.