A property is likely to be the biggest purchase you’ll ever make. It would be devastating to lose everything in a fire or flood, but it would be even worse if you didn’t have home insurance in place. We look at why you need it.
1. Financial protection
If your home was damaged or your possessions stolen, how would you meet the costs of repairs or replacements?
With household insurance in place, if anything happens to your property or possessions that’s covered by your policy, you’ll be protected financially.
2. Getting a mortgage
If you buy a property with a mortgage, no lender will give you a loan without buildings insurance. Your property is the mortgage lender’s security on the loan so, understandably, the lender will want to protect their financial interest by making sure the property is insured against damage from fire, storms or subsidence.
Your mortgage provider will usually offer to sell you buildings insurance, but you can shop around for it.
3. Alternative accommodation
Let’s hope it will never happen, but what if a fire ripped through your property? Or a flood caused widespread water damage? Where would you live if your house was uninhabitable?
Most home insurance policies will provide you, your family and domestic pets with somewhere to stay if your home is so badly damaged that it means you can no longer continue to live there.
4. Cover against accidents
It’s easy to spill wine on your new carpet or bang a nail through a pipe by mistake. If your home insurance policy includes accidental damage cover it could pay out for replacements or to repair the damage. If this type of cover isn’t included in your policy, you can usually add it on.
5. New for old
Most possessions will probably be worth less now than when you bought them – your five-year-old laptop, for example. But if something happened to them, you’d want to buy new versions. New for old cover allows exactly that. You get a new replacement if something old is lost or damaged. Not all policies include this type of cover so make sure you check.
6. Home emergencies
If you have a burst pipe or a door that’s been broken in a burglary, you’ll want it fixed fast. Home emergency cover provides you with access to tradesmen appointed by the insurance company, often via a 24-hour helpline. Home emergency cover is included in some insurance policies and can often be added on.
(Emergency cover is an optional extra with HSBC Home Insurance)
Choosing home insurance
Home insurance is a general term used to describe two types of insurance – buildings and contents.
You can buy these separately or as a joint policy from one insurance company.
Make sure you get the correct level of cover, or you could be left out of pocket if you ever have to make a claim.
Did you know...? More than a quarter of UK households have no contents insurance, leaving possessions worth over £266 billion unprotected and at risk.