When you buy a home there are a number of different things you will need to consider, and insurance will be one of those. In addition to the standard buildings and contents insurance you will need to think about mortgage insurance, life policies etc.
It is likely that your home will be your biggest financial investment and as such it is important that you protect it in every way possible.
Buildings and Contents
Buildings insurance will cover the property against a number of risks including natural events such as storms and flooding, vandalism, subsidence, fires, water and oil leaks and more.
It is vital that buildings insurance is taken out and effective from exchange of contracts. The property becomes the legal responsibility of the buyer from the point that contracts are exchanged, and therefore if any of the above events occur between exchange and completion the buyer will still be obliged to proceed.
When purchasing a flat the buyer will have to buy a joint policy together with the other occupiers of the building. The cost of the joint insurance usually forms part of the service charge.
Generally speaking, the policy should cover the cost of reinstatement.
Contents insurance provides cover for all valuable possessions against a number of events such as theft, fire, flood and in some situations (depending on the nature of the policy) they can cover accidental damage.
Contents insurance will sometimes also cover possessions which you take out of the house, for example mobile telephones, sunglasses and jewellery.
Always be sure to check that the sum to be covered is the same, or similar to the overall value of your possessions.
Mortgage payment protection insurance
This will cover the cost of mortgage repayments if the homeowner is unable to make these payments maybe due to short term unemployment or ill health.
It is always prudent to ensure that the policy covers all personal circumstances. Some, for example, will not pay if the homeowner is undertaking temporary or part time work. Some policies even go as far as excluding medical conditions and pregnancy.
Life Insurance
When taking out a mortgage it is almost certain that the lender will request that the borrower takes out a life insurance policy, sufficient to cover the cost of the mortgage.
If the borrower was to pass away or become permanently incapable of paying the mortgage the property could be at risk of repossession, especially if there was nobody able to help the borrower make the repayments.
Some lenders may not require a life policy to be taken out but with the above said, it is always prudent to have one.
If you have a query or would like to book an appointment please get in touch with our First Contact team on 01256 320555 or email mail@clarkeandson.co.uk
