Buildings and Contents Insurance
Building and contents insurance covers the physical house structure and permanent fixtures, including patios, driveways and septic tanks. The type of damage that occurs is covered by what it says in your policy. Damage from pests, frost and leaking gutters is often not included with your Buildings Insurance.
Buildings Insurance is not a legal requirement, but most mortgage lenders will insist that you have it, as part of your mortgage agreement. It is always worth reading the fine print.
Building sum insured is based on reinstatement cost only and not the value of your home. Reinstatement cost of a building is the amount it would cost you to totally rebuild your home in the event that it was totally destroyed. You should take into consideration the cost of clearing the land of debris, labour, building materials as well as reinstalling facilities such as double glazing and central heating.
Home Contents Insurance
Home contents insurance covers your personal and household belongings, typically covering items that are within your property. Contents can be protected against theft and damage, including fire, flooding and other unusual causes like falling trees or lightning. Policies can also cover locksmith fees and theft of cash.
Depending on your policy, cost for alternative accommodation is covered if you have to move out of your home temporarily due to damage.
Content insurance typically asks you to determine the value of your belongings in order to price your policy. Policies tend to fall into two categories. New for Old insurance, will pay you the full cost of your possessions at their original price or replace them, regardless of how old they were when damaged or stolen. Indemnity cover will pay you the amount that your possessions are worth at the current state and age, meaning you may receive a percentage of their original worth.