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Home Insurance – A Glossary
When you’re looking into getting home insurance for the first time, the whole process can seem somewhat baffling. With everyone telling you how great their deals are, how do you go about choosing which one best suits you? Well, as long as you know what you’re dealing with and what key features to look out for, then you should be able to make an informed decision. It’s best to start from the very beginning, so make sure you understand all the terms and features before progressing any further.
Buildings and Contents Cover. When people talk about ‘Home Insurance’, it’s generally used as a broad term branching over two main types of cover – buildings, and contents. Buildings cover will insure the building itself and any permanent features, like built in wardrobes and kitchens. Contents cover, however, will insure your possessions within the home, like TVs and furniture. Many companies like Alliance & Leicester will give you some form of discount when you buy both buildings and contents cover together.
New for Old. Fairly self-explanatory, ‘new for old’ is basically a feature of contents cover that means your insurance company will provide you with a new item should anything happen to the one that you currently own. Not every company provides the ‘new for old’ feature and those that do (like NatWest and ASDA) provide it on everything except linen, clothing and sometimes bicycles.
Specified Perils and Accidental Damage. These terms refer to a choice you may well have to make when choosing your home insurance. If you choose to insure only against ‘specified perils’ your home and contents will only be covered if they are damaged by those events specified, whereas ‘accidental damage’ cover usually means that you can claim if, for example, someone spills paint or wine on your carpet. Because it is more wide ranging, ‘accidental damage’ cover is generally more expensive, but if your situation means that you are likely to see your home damaged in accidental circumstances (for example, if you have small children running around the house) then it is worth considering.
Legal Expenses Cover. Some companies automatically provide legal expenses cover in the price of your policy, however others may need to be told to include it. When it comes to legal expenses cover, most insurance companies offer up to £50,000 to help towards legal assistance in a variety of civil disputes.
Excess. It is worth remembering that most companies will ask you to pay an ‘excess’ when you are making a claim, so it’s worth checking what your excesses are and seeing if any claims will be worth it. You can often lower the price of your premium by opting to have a higher total excess, as opposed to just paying the compulsory one.
Though sorting out home insurance can seem like a bit of a headache, as long as you know what the terms and features are referring to then the process should be made easier.
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