Insurance is something that most of us have if we own or rent a home. If we rent then we will not need buildings insurance but we may still want to insure the contents of our home. If we own a home with a mortgage then the lender will require us to have insurance on the building. If we own it outright then it will be up to us whether we insure it or not.
Should I insure?
It can be confusing knowing whether we should insure our home or not. It can feel like we are paying out a lot of money each month and not seeing anything in return for it. The premiums tend to go up each year and then if we make a claim on the insurance, they go up even more. It is worth thinking about what insurance is really for. You should think of insurance as a way to cover costs that you would otherwise not be able to afford. Imagine if your home burns down to the ground, it floods or collapses. If any of these happens it is extremely unlikely that you would have the money to pay for the damage whether that is to the house itself or to the contents or both. You need to think about how you might manage as it is unlikely that anyone else would be able to help you with regards to the cost. It could mean that you will have to move from a home you own into a rental and you may not be able to afford to replace many of the possessions that you have lost. You need to think about the impact that any loss will have on you. You might also want to think about the risk and whether you feel there is a large or small risk that you will be in the situation of losing your possession and/or home. This is what the insurance company ill look at as well as they will charge more money for a higher risk home than a lower risk one.
Finding cheap insurance
If you do decide to go for insurance then you will want to make sure that you are not paying more than necessary. If you home is seen as high risk, perhaps because it is made of timber so a fire risk, near to water so at risk of flooding or in a rough area so at risk of burglary then you will pay more compared with if it is seen as a low risk. You will also pay more if you home and possessions are worth more as the cost of replacing them will be higher.However, the amount that you are charged will depend on the type and amount of cover you get as well as the company that you use to insure you. Comparing insurers can take time but you can use a broker or comparison website to speed up the process, although they will not include insurers that only sell directly to customers. You should be able to see that there are a lot of insurers and the amount that they charge will vary once you have a selection of quotes.
Getting the right cover
It is important to make sure that you are getting the cover that you need though. The risk with going with a cheaper insurer is that they will not include cover for everything. It may also be possible that their customer service may not be so good and that they may not pay out so quickly for claims. It is therefore really important to make sure that you are covered for everything that you want. Consider what you want from the insurance, why you are taking it out and what you hope to get covered for. Consider as well whether it is important to you who you have the cover with and whether you know the insurer or have used them before ow whether that will not matter. Think about if you need accidental damage cover as well as emergency cover and if you want things replaced as new or at the value they are now. Read reviews of the insurer before you use them to make sure that you are happy with them and talk to them about the details of the cover you are looking at. It will probably be cheaper to sign up online but discuss it first over the phone to check the details before you apply online as you will then be able to be sure that the cover really is right for you.
It is really important to remember that although you do not want to pay out more than necessary, insurance can give peace of mind and is worth a lot if you do need to claim on it. You do need to make sure that you are getting good value for money though and that you are not paying more for the cover that you need.