About to buy that special home?

If you’re about to invest in a home that’s special, don’t put it all at risk with inadequate insurance. There are four questions you should consider before insuring it.

What’s wrong with buying home insurance on price?

Nothing at all, if all insurance was the same, but, unfortunately, it’s not. The problem is that you’re unlikely to discover the differences until you make a claim – and by then it’s far too late.

Insurers offer low prices by selling you a policy with small print that limits the sums they will pay. If you own a higher-value home or car, you’re likely to find this means you won’t be fully covered.

To be covered adequately, treated fairly and paid quickly you need specialist personal insurance. This may sound expensive, but often it only involves a modest additional premium.

How fast and fair is the claim service?

With standard insurers a claim can be a frustrating experience – often you feel you are on trial. With specialist insurers your cover isn’t questioned after the event and settlement is fast. The appraisal, "all risks" cover and a lack of limiting conditions means most non-complex claims are effectively settled quickly. What’s more, you aren’t dictated to. A specialist insurer will allow you to use your own choice of supplier or contractor and can offer you a cash settlement without any deductions.

How can I be certain I’m insured for the right sums?

Most insurers leave you to work out the cost of rebuilding your house or replacing lost possessions. But there’s a catch. If you under-estimate they can penalise you. Rather than paying up to your actual level of insurance – they can reduce your payout in proportion to your level of under-insurance! It can create a big shortfall.

The best specialist insurers offer a free home appraisal – to eliminate over or under-insurance. They visit your home to assess an accurate rebuild value and advise on the correct level of contents and valuables cover. The very best offer Extended Replacement Cost cover, which means the insurer will guarantee to rebuild your home as it was, even if it costs more than the original appraised sum.

Are there other pitfalls to watch out for?

Yes, two major ones:

Check you are covered for ‘all risks’. Standard insurance is "perils based". This means you are only covered for loss or damage by specific causes listed in your policy – usually fire, theft, storm or water damage – and often only in your home. If a cause, like accidental damage, is not explicitly listed …then you’re not covered.
Specialist insurers take a more comprehensive approach. They list a few reasonable exclusions and absolutely everything else is covered anywhere in the world. It’s called ‘all risks’.
Watch out for restrictive conditions. Most standard insurance includes restrictive conditions. These may invalidate theft cover if you forget to set your alarm, or excuse the insurer from paying if an item is not on your person, in your home, or under lock and key at the time of the loss, and so on. They soon add up. The best specialist insurers’ policies don’t have these limiting conditions They won’t cancel your cover because of the odd slip, like forgetting to set an alarm, or for not keeping your jewellery in a safe.Their approach is that you should be free to enjoy what you own – not be limited by it.

Who should I speak to about my home insurance?