The question of home insurance contained within the title of this piece is sometimes heard in different contexts:
- tenants who believe they don’t need cover because their landlord is providing it;
- property owners who may feel that their contents are of such little value that there is no point covering them;
- more rarely, property owners who believe that either it could “never happen to them” or that it would be more cost-effective to simply deal with any future costs out of their own financial resources rather than to pay for property insurance cover on an ongoing basis.
All of these positions may be misguided.
Tenants and home insurance
If you are a tenant in a rented property, then typically you would not need to consider the buildings-related issues associated with home insurance. So in that respect, you would have no need to compare home insurance policy options and take out appropriate cover.
However, protecting your own contents in a rented property is an entirely different consideration.
It is worth keeping in mind that whilst your landlord may have home insurance in place providing them with buildings and contents protection, that policy typically will not include any cover for your possessions used in and around your rented home.
That means if, for example, you have rented an unfurnished flat and have furnished it yourself, should it be burgled, you will not be able to claim against your landlord’s policy.
That would suggest that it might be advantageous to compare home insurance policies providing contents-only cover, in order to protect your interests.
Property owner contents valuations
Although you may not attach great value to the contents of your home, it is worth asking yourself just how much it would cost to replace them following a major problem.
Even in relatively modestly sized properties, the contents’ values can easily run into tens of thousands of pounds. You will have to meet those costs out of your own financial reserves if you have decided not to purchase contents cover as part of your home insurance (or home insurance period).
Home Insurance isn’t worth it
Perhaps you have been fortunate enough to have never needed to make a property-related claim and if so, you may think that paying for insurance isn’t a good investment of your finances.
It is worth keeping in mind though that if you are unlucky and your property is severely damaged by any one of a number of relatively commonplace perils, you may be facing a huge bill to repair and restore it. In many cases, the costs associated with rebuilding/restoring a part of a property following a major disaster, might prove to be beyond the financial means of most ordinary homeowners.
Another consideration here is the opinion of your mortgage provider, assuming you have one.
Whilst you may doubt that you need home insurance cover, the lender who has advanced you the funds to purchase your property almost certainly won’t agree. If you look at your mortgage or related loan agreement, you will typically find that it includes a mandatory requirement for you to maintain full property insurance at all times.
If you are found to be in breach of your mortgage agreement, the lender may have a legal right to require you to repay the loan in full and within a very limited period of time.
To us at GSI Insurance, this type of insurance cover should be seen as essential.
The effort involved in taking steps to compare home insurance and select an appropriate policy is relatively minor. We would be only too happy to offer our assistance.