Home Insurance

A house insurance policy can provide cover for:

• the building
• the contents
• the rental income
• other liabilities.

Insuring the building

The structure and fabric of your property is insured under this section, providing protection against such events as fire, flood, falling trees, etc.

Insuring the contents

The contents cover should be applied only to the contents you supply. If you have tenants it's their responsibility to supply insurance cover for his or her own belongings. For many insurers this is the section that causes them most concern, as tenants are seen as posing a high risk to contents.

Insuring the rental income

Business interruption, consequential loss and similar terms are used to mean an insurance cover which will make up lost rental income if damage to the buildings or contents, as defined as allowable in other sections of the policy, prevent you from receiving the full rental income. Your annual rental income is the sum insured in this case.

Insuring against other liabilities

Some policies will offer extra cover, sometimes optional, at an additional cost, and sometimes as part of the standard package. It is worth checking the small print or asking the insurance agent for details. Extra cover may include:

• Employer's liability. Only valuable if you employ someone directly.
• Public liability. Useful cover against a claim by a member of the public (possibly including your tenant).
• Legal costs. Costs of certain legal proceedings may be met but check how relevant this may be to your circumstances. A legal helpline is sometimes offered to provide instant legal advice over the telephone but again check whether queries pertaining to renting and letting can be handled.
• Personal accident. Provides cover for you, and possibly any joint owner, in the event of you sustaining injury.

Practical Tips

• Read the small print or ask your insurance agent to go over the detail.
• Watch out for exclusion clauses.
• When shopping around, make sure you compare like with like.
• Check you are not being asked to pay for cover you don't need.
• You may already have sufficient personal accident cover under another policy.
• Consider index-linking your policy so that it keeps in line with rising inflation.
• Check if there are any discounts available to you.
• Check whether the premium you are quoted includes Insurance Premium Tax.