In The Press
Author Richard T Lishman, Managing Director of money4dentists, a firm of specialist Independent Financial Advisers who help dentists across the UK manage their money and achieve their financial and lifestyle goals.
Get Assurance From Your House Insurance
Coping with unexpected barriers and the stresses and strains of the daily grind is part and parcel of everyday life. While admittedly some of these are unpreventable, there are areas where we can take necessary precautions to safeguard ourselves against possible disasters.
Home insurance is one particular provision that can be made to minimise the effects of such inconveniences, and for an average cost of £288 a year, can offer peace of mind to homeowners that their house and contents are protected. According to the latest statistics released by the Association of British Insurers in 2015, insurers paid out £12.9 million per day in property claims, of which £8.2 million were domestic. It is important to note, however, that one in five insurance claims were unsuccessful, so it crucial that you are aware of what the policy covers and the restrictions that are applied within the small print. Indeed, it is not uncommon for claims to be rejected because an individual purchased the wrong kind of cover. The other frequent mistake is that the value of the claim is below the policy excess.
There are a number of different types of home insurance available from standard cover to more bespoke, specialist policies. Buildings insurance, for instance, does what it says on the tin – as well as the structure of the house, it covers the replacement or repairs of permanent fixtures such as bathrooms and kitchens as well as the roof. Contents insurance protects your declared belongings, including electronics, jewellery, clothes, furniture and so on from incidences like theft, fire and flooding. Accidental damage cover, which can be used to repair or replace items that have been damaged – such as a smashed TV or wine stain on the carpet – is classed as an extra, so be sure to specify what you require when selecting your policy. Other extras available include home emergency cover and legal expenses. Holiday home insurance is popular too, though it is important to note that all claims are void unless you declare that it is not your main residence.
There is also listed buildings insurance if you're lucky enough to reside in a property that is classed as either a Grade I, Grade II* or Grade II listed, which can help with expensive repairs. Another specialist policy is high-value home insurance, which is typically for homes where the total contents replacement value exceeds £150,000 and the rebuild cost of the property is high. There is also non-standard construction insurance, which offers protection to those with more unusual houses that might not be eligible for policies from well-known insurers.
Statistics show that the most common claims made by policyholders in 2015 were weather (25 per cent), escaping water (21 per cent), fire (13 per cent), theft (13 per cent), accidental damage (10 per cent), domestic subsidence (4 per cent) and other domestic claims (14 per cent).
Claims for floods have increased in particular over recent years. At the end of 2015, start of 2016 alone, storms Desmond, Eva and Frank are thought to have resulted in payouts of £1.3 billion, with each claim thought to average at £50,000 – in 2013/14 it was £31,000. With research showing that heavy rainstorms are on the rise due to manmade climate change – one in five extreme rain events experienced globally are as a result of the global rise in temperature – it is possible that we could be seeing a lot more claims for bad weather and flooding in the coming years. Indeed, it is predicted that if there is a four Degrees Celsius increase, the average annual losses from river flooding and flash floods in the UK could increase by 14 per cent to £633 million by 2060. Similarly, windstorm losses would rise by 25 per cent to £827 each year; something to think about if you are not currently protected against these events. Potential incidences such as fire and so on should also be considered – after all, we never know if and when disaster will strike.
Consequently the question should never be do I need it, but what do I need? Indeed, there are a number of areas to consider including the amount of cover you will require, the cost of your contents and the area you live in (your policy might be affected by this). For that reason it can be prudent to enlist the services of a specialist agency such as insurance4dentists that can advise you on products that would be best suited to you.
We can't always control what comes our way, but we can put the necessary precautions in place to soften the blow – and for that reason, house insurance is invaluable.