Understanding Home Insurance

Home insurance is a crucial aspect of purchasing a property. In fact, some lenders require buyers to have their own home insurance policy in place, along with the building's insurance policy, before they can draw down on funds. Therefore, it is essential to have insurance, and it will be a condition of the mortgage when you buy.

However, there are different types of home insurance policies available, and it can be confusing to understand the differences between them. In this article, we will talk about the difference between buildings insurance and contents insurance.

Buildings insurance is an insurance policy that covers the structure of your property, including its walls, roof, and floors. Lenders require buyers to have this insurance because it covers things like burst pipes, subsiding, and structural movement in the property. Additionally, buildings insurance covers natural disasters such as floods and fires, vandalism, and even vehicle collision, where a car crashes through your wall.

On the other hand, contents insurance is a policy that covers the possessions inside your home, including furniture, books, kitchenware, electronics, clothing, and jewelry. If you take the roof off your house and give it a shake, everything that falls out is covered under contents insurance. This policy is not compulsory, but it is highly recommended to protect your valuable possessions.

Besides the basic coverage, additional considerations, such as legal expenses, can be covered by adding on extra features to your policy. You can also specify the value of high-ticket items like rare watches or jewelry. Additionally, accidental damage can be covered, such as spilling wine on the carpet or damaging the walls while moving furniture.

It is important to check your provider's terms and conditions before making a claim. Always ensure that your policy covers your needs and adequately protects your property and possessions. While buildings insurance is compulsory, most people take out home insurance alongside it to protect their possessions and not just the lender's security on the property.

In conclusion, home insurance is essential when purchasing a property. It provides financial protection against potential damages to your property or possessions. Understanding the difference between buildings insurance and contents insurance is crucial in selecting the right coverage for your needs. Remember to read the fine print and add on any necessary extras to ensure you are fully covered.

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