HOME INSURANCE
WHAT IS HOME INSURANCE?
Home Insurance is an insurance on your home so if it were to ever be significantly damaged or at worst, fall down, you are able to have your home repaired without full cost to you. This is also known as Buildings and Contents insurance. When buying a home a surveyor will determine what the cost of rebuilding the home will be which will have to be the minimum you insure your property for. This is usually less than the purchase price as Land wont be taken into account on a rebuild. Tom can have this cover ready to go so you can smoothly and legally exchange contracts.
DO I LEGALLY HAVE TO COVER MY HOME?
When applying for a mortgage it will state in your mortgage offer conditions that buildings insurance will be in place and active by the time you exchange contracts. When exchanging contracts you are legally binding your commitment to buy the property, therefore becoming liable for the building. You have to legally have this in place for yourself but also for the lender.
DIFFERENT COVER TYPES
Buildings
This is to cover the actual building itself. So for example if there were a terrible storm that blew your roof off the insurance would pay to have this repaired and put back into the state it was previously. If there were a fire and damaged all the walls and ceilings, the buildings insurance would cover the repair and cost for this.
Contents
This is to cover whats inside the property up to a specified amount. So if in the buildings example you had a fire in your kitchen and it destroyed your white goods and it spread to the lounge and damaged items like your sofa and TV, the contents insurance would cover the replacement of these.
WHAT IF I AM BUYING AN APARTMENT?
This is a great question as you are not liable for the damage to the building. It will be stated in your legal work so make sure you check this but when buying an apartment you would usually only have Contents insurance. For example, if upstairs had a leak and it damaged your ceiling then the owner of the building has insurance to cover this, however if that leak dripped down and damaged your TV and ruined your Sofa, then your contents insurance can cover the replacement of those.
As with all insurance policies, conditions and exclusions will apply.