House contents insurance vs home insurance

LUCKSON MOSEKI
Correspondent | Tuesday August 6, 2013 00:00

 

 Once the transfer of ownership is complete and you own your home outright, it is now time to think about safeguarding your investment. Insurance is the next logical step when it comes to matters of this nature and navigating the world of insurance can be the bane of many new homeowners unless properly prepared.With so many different types of insurance and products available in the market, it is important to ensure that you have the right type of insurance suited to your needs. When looking for home and house contents insurance, there may be many questions you want to consider. One of the main queries may be, 'What is the difference between home and contents insurance and how do they work together?' For most people their property and possessions combined make up the extent of their main assets; so safeguarding these against theft or damage with combined home-and-contents insurance is important. This should be considered carefully before you sign up with any insurance company.

Home insurance (also referred to as buildings insurance) provides cover for the structure itself, including permanent fixtures and fittings such as baths and toilets, fitted kitchens and fitted bedroom cupboards and interior decorations. Home insurance policies also usually cover garages, greenhouses and garden sheds but this is certainly worth checking if you require this cover.

Contents insurance covers just about everything you would take with you if you moved house. Items that may be included are televisions (TVs), computers and other home electronics, furniture, carpets, kitchen equipment and clothes. Some policies also include the contents you store in your garden and garage, too, apart from vehicles.Home insurance is sometimes included when you sign up for a mortgage and it is a good idea to check with your bank before seeking an outside insurance company to insure your home. If you rent a property you only need to worry about contents cover. If you own a property, you'll probably be required to have buildings insurance as a mortgage condition, whereas contents cover is voluntary, as it is only you who will lose out in the event of theft or breakage.

A good rule-of-thumb for telling the difference between buildings and contents insurance is to imagine you're a giant and able to pick up the house in your hand. Now turn the house upside down and give it a shake. Everything that remains in place (walls, doors, bath, sinks etc) is covered by buildings insurance while everything that falls to the ceiling (television, bed, sofa etc.) is covered by contents insurance.

When assessing how much building insurance you require, be aware that you only need to insure the cost of rebuilding your home and not its market value. If you live in a period house or unusual property, you should ensure that your cover is high enough to allow for rebuilding in the style of your home. A common oversight occurs when homeowners extend their properties but forget to increase their buildings cover.In the event of a claim, a payout will only be made on the part of your house covered by insurance - a potentially costly error. It is important, therefore, to ensure you are adequately prepared and informed on how both these forms of insurance work.There is much to consider when looking for home insurance and home contents insurance. It is something that needs to be reviewed annually to ensure that when claiming you are not shocked to discover that you are covered for much less than what you imagined. Preparation is, as they say, everything.