Home insurance that used to just cover bricks and mortar
now covers lots of other things.
I've just renewed my home insurance and got a new policy with a 40% reduction on the renewal price I was offered by my previous insurers. This was easily achievable because all I wanted was the basic insurance required to rebuild the property should a 747 fall out of the sky onto it. I have avoided all of the options for accidental cover, legal protection, loss of contents and all the other myriad of policy options.
I take the view that if I'm not insured for this stuff then I'll be more careful around the home and make damn sure I don't leave electrical appliances on or taps running. I'm comfortable with this. I'm single, have fire alarms fitted and good quality window locks. There are no kids running around the house trying to pull it apart and my possessions are barely worth taking the trouble to steal. My viewpoint is one that I will take responsibility for the small household loses. If I need a new carpet because of a water pipe failure then so be it, I'll go and buy a new carpet. If the house catches fire, then I'll hope it gets burnt all the way to the ground since even the basic level of insurance will rebuild a sparkling new property to my own specification. I treat the home contents element of home insurance as a late loan. It's like I'm paying for the loan before I've even received the money, if I ever do. I could go 10 years paying for it without ever claiming a thing. Since I haven't claimed for anything in over 20 years of being a home owner I must have saved myself a fair sum of money by now.
If you are a family with boisterous children, inquisitive pets, or have just purchased the latest home cinema system then that's good reason to have a much higher level of cover than me. If you have some risk of flooding then you don't want to have to pay out for the entire refurbishment of your lower floors without the assistance of a home insurance claim. The insurance companies will oblige you with all sorts of cover for accidental damage to bathrooms, windows, setting fire to the drapes, teenagers jumping up and down and causing the ceiling plaster to fall apart, test firing air rifles in your garden and pretty much any other activity that avoids common sense.
The only two elements of a home insurance policy that are completely unavoidable are a) rebuilding cover and b) third party public liability cover. If a delivery man walks down my driveway, slips up and breaks his neck, I want the insurance to protect me from any claim he will make against me for having a slippery driveway. I need rebuilding cover because I have a mortgage on the property. It is a requirement that I can claim for the property to be completely rebuilt should it disintegrate to dust one day. Without it the mortgage company will want their money back pronto.
As with most insurances, home insurance provides policy excess sliders that allow you to vary how many low cost repairs you are willing to pay for yourself. The policy will state that the property has to be in good state of repair during the life of the policy. This requirement pretty well makes you responsible for small repairs anyway regardless of the excess slider. You can't just leave your roof for months with missing tiles and then expect the insurance company to pay out for repairs. According to the policy you have to take action when a repair is needed. Increasing the policy excess slider will dramatically lower the cost of the premiums for home insurance.
Several people I know are quite adept at claiming for every broken or damaged item in a household. They have the process of filling in a claims form down to a fine art. Maybe I'm wrong. Maybe I should be the same as these people. One of them told me he has received far more in insurance claims than he has ever paid out in insurance premiums. But this doesn't tie up with my common sense logic. Insurance companies don't lose money. They make great efforts to build up complex formulae on computers to predict how likely we are to claim and what size of claim. My gut feeling is the more you claim, you more you will pay next time when you want insurance. Those insurance companies are determined to get the money back for the pay outs they have made. On top of this, it only takes one false claim to be discovered, to land you in hot water with all insurance companies for the foreseeable future. The people who complain the most about the cost of home insurance tend to be those people who have had the most claims turned down.
3 Things That Annoy Me
In general, home insurance, and certainly building insurance is a necessary thing to have. But there are several practices insurance companies do that grate me.
When your old policy is close to expiring we get a letter a in the post informing us of this. This is very decent of the insurance company but what troubles me is that they state they are going to automatically renew the insurance unless I tell them otherwise. In the good old days when we all paid our insurance by check they were unable to pull this trick. But these days most of us pay by credit card online so they already have our payment details. I find it a bit of cheek that they should take it upon themselves to take responsibility for my affairs without my permission. Yes my property will need to be insured, but that's my responsibility, not there's.
The other aspect of the renewal policy they are intend to force upon me is that the renewal premiums are always sky high. It's like they are punishing the lazy for not phoning up and canceling the policy and digging around for a new one. In my experience, finding a new policy with a different insurer is always, always cheaper than renewing with an existing insurer. These days it only takes about 10 minutes on a web site to find a far better offer. Wouldn't it be nice for a change for the renewal price to actually be competitive. I get that warm feeling inside when I've found a new policy cheaper than their, let's be truthful, insulting offer.
The last thing I want to mention is cancellation fees. We only tend to cancel the policies when we move home but have you seen the fees insurance companies charge for canceling a policy? It can cost up to half the price of the policy just to cancel it.
Does it Make You Feel Safe?
If having an extensive home insurance policy makes you feel protected then that's great. If you are a daredevil and you just want the very basic cover then that's great too. It all comes down to how risk adverse you are. Statistics show that you are more likely to have an accident in your home than pretty much anywhere else so you have two choices, be prepared or be covered.
If you are letting out a property then it probably is wise to have a higher level of cover. Do you really trust the students you are letting rooms out to when they've come back from a party having downed three bottles of Bacardi and forgotten to turn the grill off from the night before.
People and nature are the main cause of the deterioration of a property. If nothing ever needs to be repaired or replaced then you're a very lucky home owner!
| All content copyright © 2009. | Privacy Policy | Terms Of Use |
