Buying your first home is exciting, but the administrative tasks can quickly become overwhelming, in particular working out what insurance you need to properly protect your new investment. Here’s a short guide to help with the policies available to you as a first-time buyer.
What is buildings insurance and do I need it?
Buildings insurance covers your house and all of its fixtures against risks such as fire, floods, subsidence, and theft. Although it isn’t a legal requirement, it is a stipulation of many mortgage providers, and also offers you peace of mind.
Key point: Make sure you are accurate with your rebuild costs—in the event that your home should need to be rebuilt, you need to be sure that you are adequately insured.
What is contents insurance and do I need it?
Contents insurance is designed to cover any damage to, or loss of, your belongings inside your home, ie. everything you would take with you if you moved. Again, it’s not a legal requirement, but if you don’t have access to funds that would enable you to replace everything you own if it should be damaged in a fire or flood, then it’s definitely worth getting.
Key point: Take an inventory of your items to ensure you are adequately covered. This can be in any format, but video is often the quickest and easiest.
Do I need any other insurance?
It’s worth considering how you, or your family, would pay your mortgage if you were to fall ill, or in the event of your death. Policies that will help cover the payments are:
- Life insurance. This will pay your mortgage in the event of your death.
- Critical illness cover. This will make sure that if you receive a serious diagnosis, such as cancer, you will be given a lump sum of money towards your mortgage.
- Income protection. This is a monthly income that will be available to you if you are injured or ill and unable to work.
How do I make sure I’m getting the best deal on my insurance?
There is a wide range of policies available, and which one you choose depends on your needs. You may want to add extras such as accidental damage or legal costs, which can push up the price. The best way to get a policy that is truly tailored to your needs is to speak to an expert.
