Please click for a price comparison

How to Decide How Much Home Insurance You Need

Deciding on how much home insurance cover to take out can be tricky because the costs involved in replacing contents or rebuilding damaged structures are sure to vary over time. Not all of us are financial wizards who can keep a track of inflation. It is, however, important to carefully assess the extent of home cover that you need, so that you don’t land up with higher premiums than necessary, or be under-insured, which can be a lot worse.

Determining the Level of Cover you need

Home insurance includes both building and content insurance.

Building Insurance

When insuring the building or the structure It is common sense to get the building insured for its rebuild value and not the market value, in order to cover for the inflationary costs of building materials and services, regardless of how high the present market prices are. Building insurance often includes fittings, as in modular kitchens and fitted baths.

Homeowners can use the home insurance calculator on the Building Cost Information Service (BCIS) website to get a fair idea of the rebuild value of their homes.

Contents Insurance

Insuring personal belongings, valuables and home contents is essential for many people, given the expense of replacing personal items (especially electrical gadgets), as well as the high rate of break-ins and thefts. Online calculators can help assess the value of contents, or you may wish to use the old-fashioned but still very effective method of listing every item in your home. This can prove a very wise decision if you do in fact suffer a loss because it is easy to overlook missing items at a traumatic time such as after a burglary, but a list of your possessions would make it much easier to fill in your claims form. However, make sure to factor in depreciation and any wear-and-tear wherever applicable.

There are three different content insurance options being offered.

• Sum Insured – Select contents that are covered based on the client's request.

• Unlimited Sum Insured – All contents are covered, by default .

• Bedrooms – The value of the contents cover is determined by the number of bedrooms in the home. This option usually offers between £40,000 and £50,000 of standard coverage, making it suitable for many homes.

Wider coverage for individual expensive items is often offered at an additional premium and the choice will vary from one insurer to another. You may need to specify valuable personal belongings, especially easily portable devices, and also the data stored on these devices; sometimes this can be more valuable than the devices themselves.

There is often a choice between indemnity cover and replacements. Most content insurance schemes pay for replacing damaged or lost items with new ones, or simply reimburse the current value of the insured items. Replacements usually come at a higher premium.

The scope of content cover and the exact list of items covered will vary from one insurance provider to another. Shopping around for a scheme that best suits one’s belongings is a must.

The process doesn’t end here, for home contents can often increase during festive occasions such as Christmas (sadly a peak period for burglaries) weddings, birthdays etc. Updating the contents cover to include any new major addition to the home collection is a must to guard against any nasty shocks.

Thinking that 'it won't happen to you' can prove very expensive. Statistics from the Association of British Insurers reveal that it has dealt with building insurance claims worth £9 million a day during the year 2011. Just make sure that you aren’t caught stranded!

Copyright Dawn Phillips All Rights Reserved