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Home Insurance: No one likes to think about the worst-case scenarios, especially when it comes to the financial impact. But did you know that if a major storm, like the one the UK experienced in the late 1980s, hit today, the consequences could be severe?
Each year when our renewal notices come through the post for our home contents insurance and/or home buildings insurance, most of us automatically sign the form and send it back to the insurance company – after all, we already know how much the premiums are going to be. Big financial mistake, and here are 4 reasons why:
Did You Buy Anything New In The Last Year?
If you bought anything new in the past year, like a new TV or video recorder, the value of these new items won’t be included in the renewal notice you just sent to the insurance company. Likewise, if you sold anything of value over the last year, and have not informed the insurance company, then you are paying home contents insurance for something you no longer own. Either way, your not paying the right amount of insurance premiums.
Did The Costs Stay Static?
When you have home contents insurance, it means you’re covering the cost to replace your personal belongings with new ones. On the other hand, home buildings insurance helps cover the cost of labor and materials needed to repair or rebuild your home.
Now, think about this: Would it cost the same to replace the picture hanging in your living room today as it did last year?
If the answer is that it would cost you more, tough luck, you’ll only get paid out what you said the cost of replacing it would be! The same can be said of your friendly builder, would he charge you the same for an hour of his time and for his materials today as he would have done last year? If the answer here is no, then you should be expecting to pay him the difference.
Did The Value Of Your Home Stay The Same?
Similar to the above, with your home buildings insurance you need to be asking yourself whether or not the value of your home stayed the same this year as it was last year? You need to be asking yourself this question even if you didn’t do any work to the house – such as building an extension – that would naturally automatically add value to your home.
Is Your House Any Safer Today?
Well, you have to guess and check if your house is safer or not. Think about any upgrades or security measures you may have added over the past year. Have you installed new locks, a security system, or even fire alarms? If so, these improvements could reduce your insurance premiums, but only if you let your insurance company know.
Conclusion
Renewing your home insurance without reviewing it can be a costly mistake. Over time, the value of your belongings and your home itself can change, not to mention the cost of labor and materials. By taking the time to update your insurance policy, you ensure that you’re paying the right amount in premiums and that you’re fully covered in case of an emergency. So, next time that renewal notice comes through the post, take a moment to review your policy—your future self will thank you.