Keytek’s Guide to Insurance
You are not required to have home insurance or contents insurance by law but homeowners insurance may be required by your mortgage lender. Buying building, home and contents insurance through your mortgage lender or mortgage advisor is not always the best route to go down either as it may be more expensive.
What’s the difference between home and contents insurance?
Home insurance or buildings insurance as it is also called generally covers everything that is built in your home including your kitchens, bathrooms, pipes etc. should it get damaged or destroyed. As a basic rule of thumb home insurance is able to cover the costs of your home if it needed to be rebuilt from the ground up!
Contents insurance covers your belongings inside your home and protects it against things such as theft, fires, floods etc. contents insurance is not usually required by your mortgage provider as their interest lie in the property they have invested in.
How to buy home insurance & contents insurance
As we mentioned above, some mortgage lenders and mortgage advisors offer home insurance and contents insurance as part of their deal but for the majority it is cheaper to find your own home and contents insurance. Buying home insurance and contents insurance is super easy with the price comparison websites such as ‘Compare the Market’ and ‘Money Supermarket’ which will provide you with a monthly or annual cost.
What to look for in home and contents insurance?
- Amount of cover: with home insurance you need to factor the amount of cover you’ll need should you need to rebuild your home from the ground up. Not the amount the property is worth.
- New for old: new for old cover means that should your contents need replacing it is replaced with a newer version of what was stolen. Such as a new TV for the current year rather than one that may have been outdated.
- Personal protections cover: this is required if you need to insure your belongings outside of your home such as a camera, laptop or bike. You may even need this insurance for things stored inside your garden shed.
- Specialist content insurance: you will need to check your insurance to ensure it covers your valuables such as antiques as not all basic content insurances cover this.
- Specialist home insurance: it is not one size fits all when it comes to insurance, especially if your home is a listed building or has a thatched roof. You may need to get specialist home insurance cover for these type of properties.
What can invalidate my home and contents insurance?
Another thing you need to be savvy on is the things that could invalidate your home and contents insurance such as:
- Locks: if your locks aren’t British Standard and you are burgled chances are you insurance policy won’t pay out. You can tell if your locks are British Standard by identifying the Kitemark that looks like a heart with an ‘S’ in the middle of it or by locating the British Standard number which is BS3621. You’ll find this engraving on the lock itself. If your locks aren’t British Standard, all of our NGCL Locksmiths are able to replace them so that they are insurance compliant for you.
- Not locking the doors: a frequent occurrence where insurance policies won’t pay out is if you’re burgled whilst you’re out and your door or window wasn’t locked and there is no sign of forced entry into your home.
- Unoccupied: if your home is unoccupied for more than 30 days you run the risk of invalidating your insurance should you be burgled or have anything else happen to your home after this time frame. This is because your home is more appealing and susceptible to thieves the more abandoned it looks.
- Repairs: if your home needs repairs that could affect the security of it, it can invalidate your insurance.
- Renovations: if you are carrying out renovations on your property and haven’t told your insurer they won’t pay out if anything goes wrong.
As Car Owners
If you own a vehicle you are required by law to have car insurance this is because not only does your insurance protect yourself but it covers other drives, pedestrians and anyone in your vehicle should you have an accident.
Types of car insurance
There are three different types of car insurance you can purchase for your vehicle they include third party, third party fire and theft and fully comprehensive insurance.
Third Party Car Insurance:
Third party car insurance is the absolute minimum required when insuring your vehicle. Third party insurance covers everyone else except you and the car if there were to be an accident. It does not include if your vehicle were to be stolen or damaged in a fire.
Why choose this cover I hear you ask? This policy is historically cheaper than the alternatives but as it is popular with younger, new drivers it actually works out more expensive should they need to claim on their insurance as they are 18% more likely to crash. However, Money Supermarket reports that in June 2020 the average cost of a third part insurance was £1,306 annually which is twice as much as a fully comprehensive policy.
Third Party Fire and Theft Insurance:
This type of insurance covers everyone else if an accident occurs and it is your fault like the basic third party insurance but it will also pay out should your vehicle become damaged by a fire or stolen.
This policy is cheaper on average annually than the basic third party insurance at £823 per year but is still much more expensive than a comprehensive insurance overall.
Fully Comprehensive Insurance:
The greatest cover of insurance you can buy as a motorist is a fully comprehensive insurance. This can cover almost everything and more so with added premiums such as overseas cover.
Money Supermarket states that currently fully comprehensive cover is the cheapest on the market as in June 2020 over half of their customers received a quote of £490 per year or less for this type of cover.
What to look out for when buying car insurance
When looking for your car insurance you should ensure they include the following:
- Windscreen Cover: Will your windscreen be covered if it becomes damaged? What about your sunroof? Look out for windscreen replacement access to whilst you’re at it, this is the amount of money you must pay before your insurer will repair or replace windscreen.
- Personal Belongings: If your personal belongings such a sat-nav or a handbag are stolen or damaged in an accident will this be covered in your car insurance? Did you know that money isn’t often covered in your insurance policy and you won’t be able to claim if you have a convertible car unless it was locked in the boot.
- Loss of Keys: Will your insurer pay out if your car keys are lost or stolen?
- No Claims Discount: A good policy will include a protected no claims discount so that you don’t lose it.
- Car Rescue: If your car is involved in an accident who will remove it? A good policy will ensure your car is taken off the road as part of your policy.
- Courtesy Car: Will you need a courtesy car if yours is damaged? This is another thing to look out for in your new car insurance.
- Accidental Damage Excess: Look out for how much accidental damage excess you will have to pay, a good insurance will be at £100 or less.
How to buy car insurance
Buying car insurance is relatively simple as there are a handful of comparison websites out there that take you through an easy step by step process and provide you with a range of quotes which clearly states the prices and what is included. However, not all car insurance companies are on these sites so it is worth checking around.
What makes car insurance invalid?
There are a few things that will make your car insurance invalid that you need to be aware of. These include:
- Key in Ignition: One of the biggest mistakes is leaving your car keys in the ignition as if your car is stolen your insurance claim will become invalid.
- Updating Address: Don’t forget to update your address with your insurer when you move as your claim can become invalid. This applies to students too, your insurance policy needs to be at the address you spend the most time at, in this case it’s usually your university home.
- Car Modifications: Your insurer needs to know about any modifications that your car has. This is due to the car’s value, the higher the value of the car the more likely it is to be stolen.
- Fronting: Fronting is where someone puts themselves as the main driver on someone else’s car with them as the named driver. This is often the case with parents putting themselves on their child’s car as the main driver to save money. If caught however not only will your policy be void it can also count as insurance fraud.
- Commute: You need to state whether you will driving your car to work or multiple locations for work rather than just for social reasons.
- Car Safety: Your car also needs to be in a safe working order to make a claim on your insurance. This means regular MOT and maintenance checks.
- Mileage: If you underestimate your annual mileage you insurer can choose to invalidate your insurance.
Mobile Phone Insurance
We take our mobile phones everywhere with us and smart phones these days aren’t cheap to replace should it get lost, stolen or damaged. When buying a new phone or taking out a mobile phone contract the phone provider may offer you mobile phone insurance then and there which is very handy but it might not always be the best deal. Check out price comparison websites before taking out insurance with the phone shop and ensure that everything you need is covered such as loss, theft and accidental damage (remember to ensure it covers water damage).
Another insurance you will need in your lifetime is travel insurance. We are lucky in the fact that our health expenses are covered within the NHS but we do not get the same luxuries abroad. Not only does travel insurance cover our health but it also covers our personal belongings and travel expenses in some cases. Again use a price comparison website to buy your travel insurance to get the best deal!
Income Protection Insurance
Income protection insurance provides you with a monetary income if you can’t work for some reasons such as sickness or disability. Income protection insurance covers you until you retire which is why it is also known as permanent health insurance. Income protection insurance wont provide you with your full wage as it is tax free and makes allowances for the benefits claimable once you receive it.
Critical Illness Insurance
Critical illness insurance is similar to income protection insurance in the fact that it will pay out should you become ill or have a disability but it will provide you with one big lump sum of money rather than a monthly ‘wage’.
As Business Owners
Business owners often need more insurances as their business could impact other people and the environment. As a business owner you will need the following:
- Public Liability Insurance: if you come into contact with members of the public, if you’re a Locksmith for example you will need to have public liability insurance. It allows you to make claims for injury or damage that have affected themselves, their belongings or their property.
- Professional Indemnity Insurance: if your business involves offering advice or dealing with client data, a surveyor for example then you will need professional indemnity insurance. It will pay out should a client sues you for losing them money, it’ll also cover compensation claims and legal costs.
- Employers Liability Insurance: if you employ staff you are legally required to have an employee’s liability insurance as it will cover the costs if your employer has an injury, illness or any damage as a result of their work.
- Business Buildings Insurance: this insurance is necessary even if you work from home to cover your premises from theft or accidental damage such as a fire.
- Business Contents Insurance: another thing you should consider is business contents insurance. Should you get robbed or your business property is damaged it will pay out on your claim.
- Stock Insurance: if you hold stock this insurance will cover your business if any of it gets lost, stolen or damaged.
- Product Liability Insurance: product liability insurance will protect your business if a customer were to suffer injury or damage as a result of your product. If you are a distributor of the product but not the manufacturer you may still be liable so ensure your business is protected.
- Personal Accident Insurance: personal accident insurance covers serious injuries or even death. It’ll pay out for loss of income and medical expenses too.
- Business Interruption Insurance: this will provide you with the financial cover you need should you find your business has been affected by damage such as a flood or fire.
- Business Legal Protection Insurance: this covers your business should you need to pay out for any legal expenses or if legal action is taken towards your business.