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Do I need home insurance? Tips for non-homeowners

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Living under someone else’s roof? It’s still well worth looking into home insurance. Here are some of the more frequently asked questions posed by non-homeowners.

Key on the table

Is home insurance compulsory?

There is no law saying you have to buy home insurance, but an increasing number of lettings agents are making contents insurance compulsory. Even if they don’t, it’s well worth considering if you don’t want to risk losing out on a large chunk of your deposit.

How much contents cover should I get?

A typical three bed home with two adults and two children needs £20k – 30k cover at least.

To work out how much you need, walk around your home and list the contents of each room. Do the same in the garden, shed or garage if required. Tot up the value of all the items to arrive at how much contents cover you require.

To remain adequately insured, don’t forget to increase cover when necessary, e.g. after buying expensive new items for your home. See how much cover do I need? for more details.

How can I save money on home insurance?

Here are four quick ways to save:

1. Use comparison sites like Confused.com to find home insurance bargains.

2. Switch every year. Home insurance competition means prices change all the time, so you could find cover for less than you paid last year.

3. Only pay for what you need, e.g. don’t over insure the property, and consider whether you really need extras like accidental damage cover

4. Agreeing to pay a higher level of excess insurance will reduce your premiums.

How much does it cost to cancel my current insurance?

This depends on your insurance provider, however the FSA (Financial Services Authority) have given guidance that it should not be a punitive amount. It is therefore typically one month’s premium (£40 average).

Calculating the cost of getting a mortgage

What is voluntary excess?

This is the amount of any claim that you agree to pay over and above the insurer’s compulsory excess.

For example, if your home insurance has compulsory excess of £100, voluntary excess of £100, and you make a claim for £300, you will only receive £100 back in compensation as the various excesses total £200. However, the more voluntary excess you agree to pay, the lower your premiums.

What does new-for-old mean?

If your contents cover includes ‘new-for-old’, then any insured items that are stolen or damaged will be replaced as new, regardless of age. E.g. if you break your five year old laptop, the insurer will replace it with a brand new equivalent model.

What is a high risk item?

A high risk item is something the insurer deems to be either expensive to replace if lost/broken or attractive to a thief and therefore more likely to be stolen.

What is accidental damage cover?

Accidents happen and most policies won’t cover you for them.

With buildings insurance, accidental damage would cover your home if, for instance, you drive into your wall or garage door. However, this is the responsibility of the homeowner.

With contents, you can be covered for such events as a wine spill on a new carpet. Read accidental damage explained for more info.

What is business use?

If you have a business registered to your address or you run a home office, this is classed as business use. Simply working from home on the odd occasion would not be considered business use. To learn more, check out our guide to home insurance for home-based workers.

How do I know what my alarm type is?

An alarm should be accompanied by certification. Your Landlord should have a copy of this information, however, if they can’t find the certificate, they could try researching the model number online.

The most common certification is NACOSS – National Approved Council of Security Systems. Check out our guide to burglar alarms for more information.

How do I know what type of locks I have?

The vast majority of homes will have locks compliant with BS3621 – which is the insurance industry standard. Compliant locks will have the British Safety Standard Kitemark stamped on the lock plate.

Is there a limit set on ‘away from home’ items?

Our home insurance panel has limited us to a maximum of £6,000 of away-from-home cover. Typical ‘away from home’ items include laptops, mobile phones, MP3 players and bicycles.

What is a self contained property?

A self contained property is one which has its own lockable front door, a kitchen and a bathroom.

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