Do I need home insurance?

By | October 28, 2016

Do I need home insurance?  Well that is dependent on several factors, firstly if you have a mortgage your mortgage supplier will require you to have some kind of building insurance. Home insurance is different but comes under the same umbrella as building insurance, as it’s insurance for your home. Building insurance is compulsory with most new mortgages, home insurance is not compulsory.

Secondly home insurance has many different levels of cover. You can take out basic home insurance, this covers you for things like fire and theft. Or you can take out fully comp insurance, this can cover almost any aspect of your home.

Of course the premiums vary significantly and how much you pay depends on different factors. Where you live, value of your house, value of your contents, how many people live there and even if you have double glazing fitted. All this contributes to what the home insurer will charge you for their cover. It is a good idea to consider this when taking out an insurance policy or buying a new home.

Do I need building insurance?

home insurance

(structurally damaged wall)

Building insurance is good to have as serious structural damage can leave you with a huge bill or even make your home worthless. This insurance is compulsory when you take out a mortgage with most companies. Building insurance is cheaper than home insurance in most cases but it does depend on your house and its location.

The cost of repairing serious structural damage can run in to the tens of thousands, footing this bill as well as paying off your existing mortgage can bankrupt some people. This could result in you loosing everything including your house. So it seems building insurance is a good thing to have in place, just in case the worst happened.

Is home insurance necessary?

Home insurance covers your home and contents, although separate contents insurance can be taken out if required. Home and contents insurance cover you for things like damage, fire and theft. If you have no home insurance and your house burns down then you will loose everything. If you an insurance policy in place then you should be covered and will get paid out. Like most insurance policies it is a gamble! The chances of your house burning down is very slim but not impossible. It is up to you whether you want to have that insurance in place just in case, for peace of mind if nothing else.

home insurance

(Home insurance theft)

Theft and contents insurance also come under home insurance and again it is a gamble taking out a policy. I guess it depends if the stuff in your house is actually worth covering with an insurance policy. If your contents is only worth a couple of grand, is there point paying upwards of hundred pounds a month to cover it. Not really.

Worst case scenario and you get burgled, just buy more stuff. The money you saved from not paying your premiums should cover the contents value. Unless you think you may get broken into every six months. But then  if you make a claim your insurers will put the premium payments up. You will be in exactly the same spot of paying out more than things are actually worth.

If you are fortunate enough to have lots of nice things in your house, a big flat screen, nice furniture, silver ware and expensive jewelry. Then its probably worth while taking out home insurance or even separate contents insurance. If you have lots of pricey stuff then you are a more likely target of theft so it is worth getting insurance. To cover these valuable possessions is expensive. So again it is a gamble taking out insurance cover them. You will have to work out content value versus insurance premium payments.

Do you wonder why casinos offer insurance when playing blackjack?

Say the dealer is dealt an ace they offer you insurance against the ace, in case the dealer makes a twenty-one. If the dealer makes a blackjack you get your money back and that’s it. If they don’t make twenty-one then you loose your insurance money and potentially your stake. To me this seems this sums up home insurance.

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