Tips for Obtaining Cheaper House Insurance UK - Your House, your home will probably be the biggest investment in your life.
With home prices trebling within the last ten years it makes sense to protect
your investment with a good quality Uk home insurance policy. A Uk Home
Insurance policy comes in three main sections:-
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Buildings Insurance
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Contents Insurance
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All Risks Insurance
If you look at Buildings Insurance, if you obtain a mortgage to buy your home,
your lender will almost certainly require you to effect building insurance.
They may arrange the policy for you or you may be free to try to buy your own
elsewhere (and of course try to obtain a cheaper premium).
The only criteria they will insist on will be as follows;
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The policy will meet the minimum standard of the lenders Hand Book
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The policy states they have an interest in the Building
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The policy is Index Linked
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In some cases, they insist they are notified if your policy lapses
If you arrange your own house insurance policy, you have to make sure that the
cover is adequate for your insurers needs (they have a lenders hand book and
specify the perils that you will have to have cover in place for. Almost all
policies arranged in the United Kingdom will satisfy lender needs. (Insurers
know that if they do not, you will be unable to borrow money against them. The
Financial Services authority require sellers of building house insurance to
provide you with a document called Keyfacts, this document will tell you all
about the insurance you are considering purchasing. The document is obliged to
inform you if the policy has any unusual exclusions of cover or conditions.
The main perils covered by a House Insurance policy are as follows:-
Fire, Lightning, Explosion, Earthquake, Storm, Tempest Flood, Landslip,
Subsidence Heave, Escape of Water, Riot civil commotion, Impact, Aircraft,
Falling Trees, Damage to TV Aerials, Theft, Malicious Damage. Accidental
Damage to underground pipes and Services. Accidental Damage to fixed glass in
doors and windows, Accidental damage to Toilets, Washbasins sinks, & Baths
etc.
The policy will have to be index linked which means the sum insured will
increase each year in line with inflation.
Your lender will also want their interest noted on the policy, this is to
satisfy something know as the Contract Rights Act which states that unless you
are named on an insurance policy wording, you will be unable to secure an
interest in any payout following a claim.
To calculate your House Insurance quote an insurer or broker, will have to ask
you various underwriting questions. In the main premiums are rated by
postcode, the postcode tells an insurer a great deal about your house and of
course the chances of them experience a loss. From the postcode they can
determine if you are situated in an area that it likely to flood, they can
tell the type of soil that your house is situated on and thus if it is likely
to suffer from subsidence. They can also tell if the property is a High Risk
area for Burglary. As well as the postcode the sum insured you choose will
decide on how much you pay for your building insurance. In essence, the higher
your sum insured the higher your premium will be.
