For many of us, our homes are the most valuable asset we’ll ever have. So when it comes to home insurance, why do we spend so little time thinking about it? Why do we rely on comparison websites offering us discounts on cinema tickets?
If you’re not confident your insurer is going to pay what you want if you claim, what makes you pay the premium? This mini guide from our insurance partners, Lloyd & Whyte will give you tips on how to make the most of your home insurance, whether you’re shopping for it, claiming on it, or renewing.
Before you buy
Understand your policy
Not all policies are created equal. Comparison websites make it easy to compare premiums, but aside from headline features such as sums insured, accidental damage and legal expenses, they don’t necessarily do the same for the terms and conditions that dictate whether you can actually claim or not.
Look out for phrases like:
- 'average/underinsurance' - your insurer may be able to apply a penalty to any claim settlement if your sum insured is insufficient to rebuild the entire house and/or replace everything in it
- 'minimum security' - a specific type of lock may be required or you may have to lock doors and windows at night, including those upstairs, even if you’re in the house
- 'alarm clause' - you may be required to set your alarm every time you leave the house, even if it's just for five minutes.
Only by being aware of and understanding terms like these, can you be confident in what you’re buying. The last thing you want is to find out that your home insurance doesn’t work when you need it to.
Avoid common mistakes
Misinterpreting: The insurance world can seem amazingly contradictory, so it’s easy to make mistakes. For example, 'unlimited cover' doesn’t actually mean unlimited, nor will a 'blanket cover' with very high sums insured always pay up to the figure it states. Inner limits will apply to certain sections of the policy, e.g. single item limits, limits on the total value of jewellery or 'high risk' items, which might include possessions such as mobiles, tablets and computers.
If you have bought 'unlimited cover' thinking that everything is covered for all eventualities – please think again. Check the policy documents before you buy. You could be under-insured or the policy could be invalid.
Underestimating: Underestimating the value of contents is another mistake made by many. Most of us buy our belongings over long periods of time and if we don’t keep an up to date record, we might forget how much they’re worth. Inheritance also makes it difficult to keep track on the value of contents.
Underestimation can lead to under-insurance, which means receiving less from a claim than you originally anticipated, with penalties regularly applied even when the value of the claim is well below the total sum insured on the policy. Use our easy contents calculator to help you work out the overall worth of your possessions.
Making a claim
Making a claim is a time to appreciate the fact that you bought your insurance in the first place. You hope it’ll never happen but if it does, it’s helpful to know how to make the best out of a bad situation.
In an emergency: contact your insurer as soon as you are able to. This is crucial, as they will be able to guide you through what to do next.
In a non-emergency: check your policy schedule and policy wording or contact your broker to see if your claim is valid. If it is, then you can contact your insurer to get the process started. Keep in mind that a claim may affect your future premiums. Don’t claim for small amounts.
Make the claims process easier on yourself by being honest with your insurer and be sure to give them as much information as you possibly can. They are on your side and will do as much as they can to help. If you’re in any doubt, you may wish to use a broker to place your insurance, as they will be there to assist you in the event of a claim, as well as ensuring you have the right policy in the first instance.
New insurance legislation introduced on 1 October 2018 encourages people to shop around before they renew their insurance. The rules also affirm that your insurer should explain why your policy is relevant to you.
Understand what is most important to you; is it premium, cover or the service you receive, particularly in the event of a claim? Aside from the obvious fire, theft and accidental damage, what events are you most concerned about? Are you happy to spend time deciphering the terms and conditions of a policy yourself and researching the insurer or do you want someone to help with this and advise you?
When you have decided on this and the various features of cover you want included, make sure to compare these values both in the various policies available and the companies that provide them.
Receive advice and service
A comparison website can be a great place to get a quote, but nothing beats speaking to a person who knows what they’re talking about. Insurance brokers can help save you time and provide peace of mind, using their market knowledge and experience to guide you to a policy that best meets your specific requirements. They will also be able to help you arrange the right cover if you have specialist needs like a thatched house, art or jewellery collections.
How confident are you in your cover?
If you hold any reservations that your insurer would settle a claim as you would hope or you suspect your policy isn’t meeting your requirements, seek professional advice as a matter of importance. Don’t put it off and hope that you won’t have to put it to the test. The potential repercussions could be devastating.
As a BMA member, you are entitled to free and impartial advice from the team at Lloyd & Whyte. If you don’t already have a professional insurance adviser, it is worth making the most of this benefit and giving them a call to discuss your circumstances.
In addition, Lloyd & Whyte have products exclusive to BMA members, which have been developed to meet the demands and needs of healthcare professionals.