Taking out buildings and contents insurance cover is a great way to secure your home and your home’s contents. Just like car insurance, your buildings insurance provide coverage for any damage that may happen to your home and contents coverage provides for your possessions which are inside the home. What is covered in the buildings and contents insurance will vary from insurance provider to insurance provider though all policies will have some basic coverage areas such as theft or vandalism, floods, lightning damage, fire, water damage etc.
So why do you need buildings and contents insurance? Well, basically because it is your home and what is in your home, which are probably the most valuable things in your possession apart from any bank balance and shares that you may have. Also because, both your buildings and your contents are susceptible to damage due to crime, water, fire etc. These are all beyond your means to prevent in most cases and taking out insurance will at least make sure that you won’t lose much if your home does happen to get damaged due to some unforeseen circumstance. The buildings insurance will cover for your home repair and rebuild, while contents will cover for either repairing your contents or buying new ones in place of old.
Having a buildings and contents insurance is not a legal requirement. You will not be punished for not having an insurance policy as you would be if you didn’t have a car insurance policy. Yet, most mortgage holders will insist that you take buildings insurance before they agree to lend you money for the home since your home is their collateral against the money they lend you. As for contents insurance, it would be safer to have a contents insurance policy whether you are a home owner or a tenant.
It is better that you do some research before you settle on a particular buildings and contents insurance policy. The premiums, areas covered (such as just the building or your garage or shed as well) etc will be different. The buildings insurance provided by mortgage lenders will almost always be high and unsuitable, hence shop around. When you take out buildings insurance make sure that you are taking a rebuild insurance and not insurance based on the market value.
You can reduce your buildings and contents insurance premiums by installing burglar alarms and smoke alarms in your home, participating in neighbourhood watches etc. Just as with car insurance, increasing the excess on your policy will reduce the premiums in this case as well. Just look around and you are sure to find policies which suit you.