Whether you own your home or rent it, you need to have contents insurance. Homeowners will also need to have buildings insurance and may have to have life assurance as part of the conditions of their mortgage.
Insurance protects you against risk. In return for this cover, you pay a premium to the insurance company. You can usually pay your premiums in a lump sum or in monthly deductions. You may never have to make a claim, but if something does go wrong, insurance can save you thousands of pounds.
Buying insurance
Shop around for insurance. Comparison websites usually allow you to compare deal from a range of providers, but not all providers will be listed on these sites. You could also ask an insurance broker to help find insurance, but this person may charge a fee.
Contents insurance
Every tenant and homeowner should have contents insurance to protect your furniture and possessions from fire, theft, flood and other damage. If you are renting , your landlord's insurance will not cover damage to any of your possessions.
People who live in a Housing Executive or Housing Association property must get their own contents insurance. Without this insurance, you will have no protection for your personal belongings and furniture if the property is broken into or damaged in a flood or fire. Supporting Communities NI has teamed up with an insurance company to offer affordable contents insurance to social tenants in Northern Ireland. Ask your housing officer for details of the scheme.
How much cover?
Your contents insurance needs to cover the cost of replacing all your belongings if they are destroyed, for example if your home burned down. This total cost is called the 'sum insured'. Make sure this sum is enough to cover the cost of replacing all your goods.
Valuable items may have to be added as individual high value items on your policy or insured separately.
Buildings insurance
If you own your own home, your mortgage lender probably won't lend you any money unless you have buildings insurance. Buildings insurance covers any loss or damage to the structure and fittings of your home, like:
- kitchen units
- the bath and toilet
- fitted carpets
Remember, you'll need separate contents insurance to cover your furniture and belongings.
Buildings insurance should cover you for:
- fire damage
- storm and flood damage
- leaking or burst water pipes
- subsidence, heave and landslip
- earthquakes
- damage caused by vandals.
Buildings insurance has to cover the cost of rebuilding your home from scratch, for example if it burned down. This may be more or less than the current market value. The rebuild cost will go up over the years with inflation, and your insurer should allow for this. However, it's best to check your policy every few years, to make sure it is still adequate.
You can ask your solicitor or mortgage lender to help you find insurance. Your mortgage lender will probably have their own buildings insurance you can buy, but unless this is included in your mortgage package, you may well be better off shopping around yourself.
Mortgage insurance
It’s a good idea to take out insurance in case you are unable to pay your mortgage, for example because you fall ill or are made redundant. Mortgage protection insurance is different from Payment Protection Insurance which was mis-sold to a lot of people in a financial scam.
Other kinds of insurance
You may also want to take out:
- life insurance
- a pension
- medical insurance
- car insurance
- mortgage payment protection insurance
- pet insurance
- insurance for your boiler or other household appliances.
Visit the Associated British Insurers website if you want to find out more about the different types of insurance that are available.
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