Insuring your home
House insurance is a condition of your home loan. It covers loss and accidental damage from fire, water, burglary and natural disasters, including earthquake and landslides.
There are two main types.
- Specified Sum Insured is based on the cost to replace in the event of total loss. Adjustments and allowance should be made for demolition, rebuild costs, quality of fixtures and fittings, repairs to driveways, pools, retaining walls etc. In the event of total loss the insurer will pay an amount up to the specified sum insured amount.
- Indemnity cover is based on the market value of your home – it’s cheaper but it won’t pay enough to rebuild your home if it is badly damaged.
Different policies can very quite a lot in the extras they offer so you’ll need to compare them closely to see which suits you best.
Check for things like…
- How much you’re covered for if there’s an earthquake.
- How much owners liability cover.
- Are accommodation costs covered if you have to move out for a while?
- Extras like damage from pets or covering for loan payments following a total loss.
You may want to insure the things that are valuable to you at the same time as your house.
Often you’ll get a discount by taking the two together.
Contents insurance covers things in the house like your furniture as well as personal items like jewellery.
Is your home secure?
Preventing problems is the best insurance you can have.
Here are a few simple tips for after you move in…
- Install smoke alarms
- Have a hose handy outside
- Have a small fire extinguisher inside
- Check storm water and other drains
- Fit good quality locks
- Get to know your neighbours
- Keep bushes near the home trimmed
- Have outdoor lights with sensors
- Use timers on inside lights if you are out
- Make sure garages and sheds lock up
- Consider installing an alarm
You can save money on premiums by…
- Choosing a higher excess ( the amount you pay yourself if you have a claim)
- Getting all your insurances together as a package deal.
- Asking about no claims bonuses.
- Asking if there’s a discount if you have a security alarm.
Please contact Oliver Broomfield Mortgage & Insurances to discuss any requirements you may have.
Making sure you can pay the loan
There are three main ways you can make sure that your home loan is paid if the worst happens.
Insure your loan – loan or mortgage protection insurance repays your loan if you die and makes loan payments for you in situations when you can’t work such as illness or accident, and redundancy.
Insure your income – income protection insurance provides an income if you can’t work. They usually cover situations like illness, accident, redundancy and bankruptcy. Payments are based on a percentage of your normal income.
Insure your life – life insurance pays out a lump sum if you die and many policies include an early payout if you are terminally ill. Some also cover critical illnesses such as cancer or strokes.
It is not enough just to buy insurance. You also need to know that if you make a claim your insurance will provide the help you’re expecting.
Here are some things to consider…
- A big well-known company is a good investment when it comes to insurance – you want to know they will still be there when you need them.
- A good claims record is more important than price – so ask friends and family about their experiences with different insurance companies.
- Read the small print carefully. Look for policies that are written in language you can understand and that have few exclusions. Ask the company to explain the conditions to you.
- Ask about a ‘free look’ period – this gives you time to read the policy and change your mind before you start paying your premiums.
- Ask about payment options – you’ll find it easier if you can match your payments to your pay days and loan payments.
We can arrange your insurance at the same time as your home loan through Oliver Broomfield Mortgage & Insurances
Do you have a Will or Enduring Power of Attorney?
When you buy your home it’s a good idea to make or update your Will. If you die without one it can take ages to get everything sorted out and the people you care about most may miss out. For instance, your partner doesn’t automatically get everything and if you’re not married they may get nothing.
The other thing you should think about is having an enduring power of attorney. This gives someone you trust the power to act on your behalf if you can’t look after your own affairs for any reason.
Both are important legal documents. Your lawyer can tell you more – and may even be happy to produce a Will for you for free.