Are you wasting hundreds of pounds a year on home insurance that won’t pay out when you need it?
Most of us don’t read all the small print on our buildings or contents policies. But, buried in the terms and conditions, there are a variety of legitimate reasons that insurers can give for refusing to honour claims.
Providers are not necessarily being sneaky: but customers who make mistakes on their application forms or fail to take reasonable security precautions, for example, could put their cover at risk in the event of a fire or a break-in.
When you buy an insurance policy, you are paying for peace of mind as much as anything else. So you need to ensure you are not making your insurance invalid by failing to comply with the terms and conditions of your policy.
These are the mistakes you need to avoid.
Get your security right
When you apply for a contents insurance policy, the quote you are given will depend on the kind of security features you say you have on your doors and windows. Many providers will give you a lower rate if you have approved locks such as key-operated ones on windows, or British Standard mortice locks on front and back doors.
Clearly it is a good idea to protect your home as well as possible. But problems could arise if your home is not in fact, as well protected as your insurer thinks.
If you fail to mention your lack of security on an application, providers are well within their rights to turn down burglary claims.
Check what your possessions are worth
Most insurers ask us to estimate the value of what we own to ensure we’re covered for the right amount. But research frequently shows consumers underestimate what their possessions are worth.
The greater the amount you’re covered for, the more your policy will cost. But if you take out just £15,000 worth of cover while actually owning £30,000 worth of possessions, for example, your insurer is entitled to pay out only 50 per cent of any claim – even if it is just for a few hundred pounds.
Another vital reason for getting the extent of your cover right is the fact that you could end up claiming for the full amount in the unfortunate event you lost everything in a fire.
Keep your insurer up to date
Make sure you keep your insurer informed of any important changes. Most policies have upper payout limits for valuable items, so if anything you own is worth more than, say, £1,000, your provider will make you insure it separately.
If you buy an expensive new TV, for example, or a valuable piece of jewellery or artwork, don’t wait until renewal to get it covered.
Check your tech cover
As the popularity of downloading increases, many of us now have substantial music and film collections sitting on our computer hard drives.
But if your laptop was stolen, would your insurer pay out for the lost video and MP3 files as well as the hardware? Not all providers cover digital downloads as standard. If in doubt, give your insurance company a call to find out whether you’re covered, and how much it would cost to extend your insurance.
Don’t rely on your landlord
If you’re renting, your landlord will probably have insurance against something happening to the fabric of the building – such as subsidence or flooding – and may even have contents insurance for his own items such as a washing machine or dishwasher.
But unless he is very generous, it is unlikely his cover will extend to your possessions as well. Don’t simply assume it does.
