Without adequate protection, one single incident, such as fire or burglary, could have a devastating effect on you and your home. Insurance can’t stop the incident happening, but it can help put things back the way they were – quickly and with the minimum of fuss. Whether you are buying a home, own a property or are renting, your home and possessions are precious. Your home contains all your belongings, memories and comforts. Choosing to insure them, and making sure you have the right insurance products for your circumstances, will offer peace of mind and can lower the financial pain of repairing your home and replacing damaged or stolen belongings. Buildings and contents insurance is also often referred to as ‘home insurance’, a combination insurance that covers both your building and its contents in one.
Buildings insurance isn’t a legal requirement, but it will usually be required by your mortgage lender. It protects the actual building you live in, for example, the roof, walls, windows, doors, et cetera. The type of incidents that buildings insurance may cover are fire, flooding and subsidence. You could receive a payment to cover damage to any part of the structure of your home, which includes built-in furniture such as fitted kitchens and wardrobes, but not impermanent content such as furnishings. In the worst case, if your home was destroyed and must be rebuilt, buildings insurance is the policy designed to cover that cost. To be totally confident that your home is adequately insured, an independent surveyor can calculate the exact rebuilding cost of your home.
Contents insurance protects the contents of the building you live in, for example, your possessions, valuables and furnishings that are not permanently attached to the building. It typically covers loss of or damage to items due to fire, theft, flooding, et cetera. The exact incidents covered, and the items covered, differ between policies. You can often pay extra to insure items even when they are lost or damaged by accident, or when they are outside your home. Otherwise, these incidents aren’t usually covered.
MORTGAGE PAYMENT PROTECTION INSURANCE
Mortgage payment protection insurance protects your home from repossession if you’re unable to make your mortgage repayments on time. You can purchase a policy that will cover the monthly mortgage repayments for up to one or two years if you can’t work, typically up to a maximum of 65% of your monthly income. Without this cover, you could lose your home if you cannot keep up with your repayments.
Life insurance protects your family’s lifestyle in case of your death or the diagnosis of a specified critical illness. It can pay out a tax-free lump sum or regular payments to help them cope without your income, which may allow them to stay in your current family home.
INCOME PROTECTION INSURANCE
Income protection insurance protects your family’s lifestyle in case you’re unable to work due to illness or injury and lose your income. It can provide a monthly payment, linked to your salary, to help you cover costs including your mortgage repayments.