Make sure you and your home are covered

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Make sure you and your home are covered

Posted By: Andrew Regan | Posted On: 2008-01-08 | Article ID: 38683

Most Britons aspire to owning their own home, and those about to get on the first step of the property ladder need to ensure that they have all the relevant insurances against mishaps, not just those relating to the home but also to the homeowner.

Buildings insurance is a requirement of any mortgage lender, and it must be adequate enough to cover the entire cost of rebuilding the property. However, many people are unaware that it is not obligatory to have buildings insurance with their lender, and so do not shop around for quotes. Often cheaper insurance is available from other sources than the lender. Recent research from the Post Office suggests that mortgage borrowers lose an estimated Ł600million taking out the lender’s insurance rather than shopping around.

Having contents insurance ensures that the homeowner’s possessions will be replaced in case of disaster or theft or even accidental damage, depending upon the level of cover. Again it is important to shop around as levels of cover and premiums vary from insurer to insurer. Also ensure that cover is adequate for the entire value of possessions on a like-for-like replacement basis, and that insurers know about expensive or valuable items that may need to be recorded on the policy document.

Many people also opt to protect their income to ensure that they can continue to meet their monthly mortgage payments in case of their incapacity. There are two options; critical illness cover will pay out a lump sum if the policyholder contracts an illness preventing them from ever working again, or income protection cover which provides a monthly payout in cases where the policyholder is unable to work because of accident or illness.

Life insurance is also a must, especially in cases where the homeowner has dependents. In cases where uninsured persons leave behind a mortgage and have no life cover, those left behind may find it difficult to continue the mortgage repayments and the property may well end up being repossessed. In order to stop that happening take out adequate life insurance that will pay off the mortgage and provide a lump sum for any dependents.

The UK life insurance industry is currently very buoyant, offering lots of competition, so it is very important to compare life insurance quotes to get the best deal. Many homeowners opt for decreasing term life assurance which reduces the level of cover in line with reducing mortgage debt. That type of cover tends to be cheaper than level term assurance which provides a fixed amount of payout throughout the term of the insurance. In many cases employers offer life insurance as a part of their remuneration package so it is worth checking before taking out a policy.

Buying those four insurances ensures that homeowners can sleep soundly in their new house, confident that should any disaster befall them they will be covered. But remember whenever considering buying insurance it is advisable to first get independent financial advice.

Article Source: http://www.articlecell.com

About The Author
Andrew Regan
Andrew Regan is an online, freelance author from Scotland. He is a keen rugby player and enjoys travelling.

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