When it comes to the old expression ‘the devil is in the detail’, homeowners and tenants of rented properties who take out home insurance could do with keeping it in mind.
From roof damage to stolen bicycles, each year cover claims are made only for those insured to subsequently find that they’re not actually covered, often due to the circumstances surrounding the claim and policy exclusions they should have been aware of.
So it’s vital to take a really close look at the small print when you take out cover, as well as even if it’s already in place but you’re uncertain of the finer details.
Here are many commonly overlooked factors, some buried in the small print and others made rather clearer, which often catch people out.
- Re-building costs of your home – It’s easy to underestimate how much it would cost to completely re-build your home from scratch. Check the maximum claim limit on the buildings insurance part of your home cover against how much a local builder or chartered surveyor estimates it would cost to re-build your property (don’t forget to include all outbuildings and garden boundary walls).
- Valuable items and item exclusions – You shouldn’t assume that all the items you own are covered. If they’re particularly valuable, and worth more than the single item claim limit on your policy, your insurer needs to know as they may have to adjust your premiums. Likewise, with some policies, items which are particularly easily damaged or targeted by thieves, such as bicycles, laptops and smartphones, might be excluded.
- Claim limits for contents – If all your possessions were damaged to the point of no return by a flood or fire, are you sure your insurance will cover you for their full worth? Many people under-estimate how much it would cost to replace all the carpets, furniture, white goods, gadgets, instruments, jewellery and clothes they own and pick the wrong maximum cover amount for their homes’ contents.
- Getting the builders in – You have to tell your insurer if you’re going to have any major building work carried out (possibly even if it’s not structural, but still fairly major, such as a new kitchen or bathroom). This would certainly be the case with loft conversions or rear extensions, for example.
- ‘New for old’ cover – Most half-decent policies will make sure you get a new version of any item you claim for, known as ‘new for old’ cover. However, cheaper policies in particular might only offer like-for-like, or ‘old for old’, cover; so if your sofa’s 15 years old, you’ll only get one worth its second hand value in return.
- Are you happy with the excess? – If you agreed an ‘excess’ (the first part of any claim that you, the insured, has to cover) which is relatively large without really realising it, you could be caught out. For example, if you made a claim worth £500, but your excess was £400, it might not be worth bothering with as it could affect your no claims bonus.
- Claims per item limits – Some policies only allow one claim for the same sort of item. So if, for example, you have a pair of expensive vases stolen or broken, the insurer might only pay out for one but not both.
- ‘Due diligence’ and home maintenance – Insurers expect policy holders to take a reasonable amount of care of their possessions and property (known as ‘due diligence’). It’s fairly reasonable as someone who leaves all their windows and doors open when they go out, only to find themselves burgled on return, can’t really complain. It’s a little more of a grey area when it comes to home maintenance, but an example might be someone who never has their boiler checked or fails to fix a sagging roof.
- Accidental damage – A common misunderstanding is that while home cover generally insures against ‘accidental damage’ outside of your control, such as from storms and flooding, it often doesn’t for damage you cause accidentally, such as by simply dropping a television while carrying it. Accidental damage cover usually costs extra, except for with the more expensive policies.
- Make sure you’re correct – Being half truthful about previous claims, or covering up that you’re a smoker and guessing when it comes to the types of locks your home has, for example, can come back to haunt you. The information you provide when you take out cover isn’t often checked until a claim is made and saying you simply got it wrong, or ‘forgot’, won’t wash.
- You claims history – Insurers always ask if you’ve made any claims in the previous 5 or 6 years. You need to be honest about previous claims or your cover could be invalid. If you’re not sure and can’t remember, don’t just guess, check with previous and current insurers.
- ‘Obligation to notify’ – In other words, you have to tell your insurer if your circumstances change which might have a bearing on your cover; having children, for example, or taking in lodgers or moving home. It also refers to giving accurate information when you first take out cover.