The small print in the home insurance policy

How much do you know about your home insurance policy? Ok, here are three questions for you to answer. Are you insured if:
a) A driver loses control of his car and the smashes into your living room.
b) A skunk finds its way into your home and now everything that you own smells badly
c) The UK is invaded by a foreign army, and your home is destroyed in the process.
You are covered for a) and b) but not for c).

When disaster strikes at your home, then you must use knowledge as your best defence, against both the invading army AND your insurance company. Once you know what your home insurance covers then you can decide whether you must buy coverage for the special exclusions like those above.

There are many different kinds of policy. Some will only cover fire, lightning, windstorms, hail, explosions, riots and other kinds of civil commotions, damage from other vehicles and burglary. Others will allow you to add to that falling objects, the weight of snow, ice and sleet, an overflow of water from your plumbing, a cracking or burning in your hot water system, the freezing of your plumbing system and any damaging effects from electrical currents that are artificially generated.

But you would be surprised at the number of events and possibilities that are not covered by your home insurance company. Here is a further quiz that gives you some situations and tells you whether they are covered. How many did you know?

Situation - A rat causes damage in your home.
Covered? - No - you are not usually covered for rodents, unless they cause a fire, the damage from which you would be covered. Most damage from wild animals is covered, unless you own the animal.

Situation - A shopping centre or a prison is built near you, so your home loses value
Covered? -No - because selling cost is not related to insurance. This is what the local authority searches your conveyancer has done should find out before you buy.

Situation - Lightning strikes a power line for your house
Covered? Yes - this is a basic coverage issue - damage from lightning, be it from fire or damage to your electronics, is covered by insurance

Situation - your home is infested by cockroaches, termites, rats or mice
Covered? No - a pest problem is considered by insurance companies as "wear and tear", part of routine maintenance around your home.

Situation - a fire destroys the computer you use for your small business run from home
Covered - No - it is important that you understand that if you run a business from home, it is not covered by a normal home insurance policy. You need to get special coverage for any business related property.

Read your home insurance policy!

 

 

 

© AskFinancially.com 2008

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