Insurances when buying a house
When you increase your financial risk, insurance is always a good idea and Home Insurance needs to be at the top of the list. It’s not a legal requirement to have Buildings or Contents Insurance, however, most lenders will insist that you have the cover in place.
What does buildings insurance cover?
Like all insurance, it won’t stop anything happening instead, it’s designed to protect you financially. If something happens to your property structure, i.e repairs or a rebuild.
Buildings insurance will typically cover flooding, fire and storm damage and subsidence. It will protect ‘fixed structure’ which will include the likes of cabinets and kitchens.
Do you need contents insurance when buying a house?
It really is worth having. On average, a UK household will own £35,000 worth of items. If you had to replace those iterms in the event of them being lost, stolen or damaged, it would cost a considerable amount. Officially, you are not legally obliged to take this level of cover, however, it is always advised.
Another thing to check, if you already have contents insurance, you need to check whether it will cover your belongings whilst they are being transported from your old house to your new house. Some policies will include this term as a standard feature and others will allow you to pay an additional premium to add it on.
Either way, you will need to use an official removal firm when moving. This is because certain insurers will insist upon the right measures being taken. Some removal firms will have insurance that will cover your items in transit, so again something for you to double check.
If they do, should you need to claim, you can claim against their policy and protect your no claims bonus.
When will I need the home insurance in place?
Your buildings insurance needs to be in place from the day you exchange contracts as this is the date you legally become responsible for the building.
If you already own a property and have the cover in place, you may need to overlap and have both properties covered. There maybe a period of time where you are responsible for the two properties.
Other forms of insurance for you to consider
Because you have taken on additional risk, Life Insurance can also be a very good idea. Nobody likes to think about what happens when they die. However, the last thing you would want to do is leave your family with a debt.
This will also lead to Critical Illness Cover and Income Protection. If you rely on your income to pay your mortgage, these forms of protection can help release that financial pressure. As part of the Life package, at Mortgage and Insurance needs we can also offer a Kids Critical Illness Cover.
If your child was to become unwell, you would want to spend as much time as possible with them. If you need to go to work, you would be unable to do that. Kids Critical Illness Cover will cover your income or a percentage of your income, allowing you to be off work during that time.
So, hopefully we’ve managed to answer the question, what insurance do I need for a mortgage?