Every homeowner needs to have comprehensive contents insurance because just having a building insurance policy isn’t going to be enough. Tenants can get by with only contents cover because landlords are obligated to have building cover. Regardless of what insurance you have, there will be gaps in coverage. Let’s look at these closely so that you can be prepared no matter what.
- Items not protected by standard contents cover
- Protecting High-Risk Items
- Ensure you are insured for these things
- Second Homes and Sublets - What policies are best?
Items not protected by standard contents cover
If you go with a standard home insurance policy, you’ll find large categories of household items that will be either severely under-protected or completely ignored by British insurers.
Any personal property that has significant value will need to be itemised when you are considering insurance quotes. Paintings, sculptures, watches, jewellery and precious materials such as gold and silver are all considered valuable items by insurance companies.
If you don’t inform your insurance provider about these articles before accepting an insurance quote, you could easily find yourself either not covered if something happens or covered by inadequate standard limits.
Policy category limits vs. Individual item limitsJust because your policy wording says that jewellery is covered up to £20,000 that does not mean that your heirloom necklace worth £5,000 will be fully reimbursed in case of a claim. This is because valuable categories, like jewellery, will have a single item limit that is far lower than the total cap.
Collections and matching sets
Whether you have matching pleather sofas and settees or you are a rare stamp collector, you will enter the entire collection or set as one item in the inventory. While this means you don’t have to painstakingly account for each individual part of the collection, any sentimental value will be excluded from the final agreed valuation.
The good news for collectors and hobbyists is that there are optional extras available with property insurance which have higher limits for your treasured possessions.
While your cat or dog may spend most of their day dwelling on the sofa, you can’t bundle them in with the rest of your home contents. This is because it’s hard for insurance suppliers to quantify what damage looks like when it comes to animals.
However, not all hope is lost, accidental damage provisions in most policies will insure your personal effects and your home in case of damage caused by Rufus and Tiddles. On the other hand, if you want to protect your pet specifically, you are better off with pet insurance.
Outdoor or garden items
Unfortunately, anything that is kept in your garden or outside your home is ripe for the picking by thieves. You should be careful when it comes to:
- Temporary swimming pools
- Bikes and Trikes
- Surfboards and other means of conveyance.
- Gardening tools
These items and others like them will be covered under certain conditions, such as making sure secure locks are being used consistently, and insurance coverage limits.
Outdoor equipment also has an impact on your personal liability because your insurance company may require you to show you were using outdoor items responsibly if they are somehow related to a claim.
Business items and tools
If you run a business out of your home, even if it’s just a hobby, you will have to categorise any items used to earn revenue under a business bracket. These include:
- Tools, instruments and materials you use to earn an income.
- Computers and printers used primarily for business purposes.
Like many of the above categories, there will be both a category-wide limit and a lower single item limit. When considering home insurance, it’s important to check whether any items for your business could exceed that key single item limit or be subject to exclusion, so that you can secure them appropriately with extra cover or specialised insurance.
Protecting High-Risk Items
With contents insurance, you can have some peace of mind about items that stay in your house. However, there are day-to-day items that you regularly take out of the house such as mobile phones, tablets and laptops. Not only do they tend to be pricey items but if something were to happen to them, replacing them can be a real hassle.
Making sure your possessions are covered
If you are concerned about the things you bring with you on a daily basis, you should ensure that personal possessions cover is included in your contents insurance. Very often this is an add-on or extra cover that you will have to pay a little more on your insurance premium.
Personal possessions cover ensures that more portable items are covered for a wider range of scenarios outside the home. Most policies will have two subcategories to sort these items:
- Unspecified Personal Possessions cover deals with things you take with you when you are out and about. This includes what you wear and carry with you. Generally, this is capped at £1,000.
- High-Risk Items is a category reserved for things that cost over £1,000. You will have to single out the items you take with you regularly in this category. These will receive a Specified Items designation to aid the insurer’s claim team in the event of an incident.
What makes high-risk items so special?
It’s not just a high monetary value that puts these items in a class of their own. Other criteria such as fragility, rarity or popularity with thieves. Here are some high-risk examples:
- Computers and tablets
- Paintings, prints and other works of art
- Rare stamps, coins and collectables
- Furs and tapestries
- Cameras, audio equipment and sports gear
- Jewellery, watches and precious materials
Ensure you are insured for these things
If you have ever had to put in an insurance claim, you might think that insurance providers are just trying to catch you out so they don’t have to pay out. While this is sometimes the case, no matter who you have insurance with, there are things you can look out for when signing up for a policy to make sure you fully protect your home.
Rebuild your home
While we’ve mainly talked about belongings, you shouldn’t forget your house. For homeowners, rebuilding a house is potentially the biggest risk you will want to have covered. Building insurance is a must because it will account for renovations, the age of the house and cost of labour and materials to cover the rebuilding cost.
Special Events need Special Protection
Weddings, funerals, births, holidays and other special occasions are times when your home is filled to the brim with gifts and other valuables. For this reason, most reputable companies will either have an extra cover option or they will extend the standard limits for a short time.
Insurers will need you to notify them ahead of time so they can amend your policy accordingly in time for any special occasion that is not customarily on the calendar.
Water Damage is Devastating
Flooding is a touchy subject for many insurance suppliers because it pushes insurance costs up. At the same time, flooding areas oscillate from year to year, which means it’s very easy to get caught out by an extreme weather event only to find out your insurance company did not update your flood policy to include you in the flooding contingency catchment area.
The issue is with flooding, if not appropriately insured for, is that it can easily fall under an Act of God definition and that means your insurer will wash their hands of much of their responsibility. However, if flooding protection is explicitly detailed in your policy wording then you’ll have more peace of mind.
Personal Liability - When the impossible happens.
Personal liability cover deals with property damage or personal injury occurring in your house. A common example is someone getting hurt at a party, they could well be entitled to compensation and if they were to pursue it, then the homeowner would be on the hook. Personal liability clauses in home insurance policies go a long way to mitigate the potential financial impact when you are held responsible by a third party.
Nowadays not all belongings are tangible objects, your iTunes downloads, games, and media backups are just as valuable. Unfortunately, if you have a large digital footprint, you could be one hard drive crash away from IT oblivion. Some home insurers are starting to catch on and are either providing data loss coverage in their core policy or as an optional bolt-on.
Second Homes and Sublets - What insurance is best?
Second homes are often seen as inherently risky by the insurance sector. This is due to the extended periods of time when they are empty which can mean damage from hazardous weather or a burglary is not immediately noticed.
Why get Unoccupied Home Insurance?
Unoccupied home insurance is suited to households with second homes because regular home insurance is invalidated by homes that are unused for more than 30 days.
Claiming that a second home is your primary home is considered fraud by the insurance sector, which can negatively impact your other house insurance plans.
Second home insurance can cover a range of scenarios that are unique to this type of property, even though the categories themselves may seem familiar.
- Public liability: If part of your home damages someone else’s property or causes injury, you’ll be covered. An common example would be a broken tile damaging a car parked on the street.
- Home emergency: With a second home, an emergency can go unnoticed for longer and therefore be more destructive. Bursting pipes leaking into a holiday home are foremost on our mind for this kind of insurance.
- Vandalism and theft: The police may not be called in as soon as it might be for a primary property meaning that unoccupied home insurance may be your only recourse.
- Legal Expenses can easily pile up if squatters or trespassers occupy your home away from home.
Are sublets covered by default?
No, they are not and the negative impact can be felt by both the tenant and the landlord if either the law or insurance contract are breached. Airbnb and flatshare rentals can shift a rented home into a house in multiple occupation classification which can lead to fines of several thousand pounds for the landlord.
Any tenant, before putting up a single picture on AirBnB, should read their tenancy agreement and check in with their landlord since, on top of a local authority fine, both contents and building insurance policies could be invalidated depending on the provider.
Churchill Insurance has stated that residential home insurance plans would be cancelled if the property is being sublet or put up on tourist home services. On the other hand, Aviva is more receptive to their customers using Airbnb, if they can lawfully do so. In the meantime, Admiral Insurance has a tailor-made Airbnb add-on for their home insurance products.
What happens when a guest steals something from your home?Home insurance companies define theft, burglary and robbery differently, leading to claims being treated differently depending on the circumstances. Theft is broadly defined as when personal possessions are stolen. Burglary involves trespassing or breaking in to steal items. Robbery is when stealing belongings involves hurting or threatening someone. Your insurer may very well define an Airbnb guest as a friend or family member which will impact how much they pay out on a claim.