Insurance Costs/Options

tntcoder

tntcoder

tntcoder

Soldato
Joined
7 Apr 2004
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4,212
Hi,

Currently in the process of buying a house, fingers crossed it goes smoothly :) Sorting out the mortgage, two things were raised that I haven't really given too much thought.

- Building insurance - anyone have a ballpark figure for how much this is likely to cost a month (3 bed/semi - no flood history + all standard stuff). Any tips on what to avoid or look out for? Or is the cheapest option to keep the lender happy good enough? Would it be wise to find some kind of combo with contents insurance?

- Mortgage Payment Protection Insurance - Probably not gonna bother with this, stable employment + savings etc - silly to dismiss this so quickly?

Thanks :)
 
You can get quotes for home buildings & contents insurance from comparison sites. You'll get a proper quote for your circumstances, rather than guesses from an internet forum. Only you can decide how much risk you're willing to take on your possessions. It's often cheaper to get a policy providing both, like with energy providers, but it's not a given. You'll need to run the numbers.

Unless you go with an unlimited policy (I have one with M&S) you'll need to sit down and list all your possessions and how much it'll cost to replace them. You'll be surprised at the total.

Bear in mind, if you were to suffer a total loss, e.g. your house burnt down, and you had £10,000 worth of belongings, for arguements sake, if you only have £5,000 worth of insurance they won't simply pay out the maximum, i.e. £5,000. They will regard you as 50% under-insured and only pay out £2,500. So you need to make sure you're adequately covered.

Cover away from? Do you go take belongings away from home, on holiday, for example?

Do you want to cover DIY accidents, e.g. a nail through a pipe, foot through a ceiling? Yes? Then you'll need accidental cover on your buildings insurance.

You may find having buildings insurance and/or mortgage (life) insurance is a requirement of the mortgage.

Do you have dependants?

Decreasing term cover that reduces pay out roughly in line with a reducing repayment mortgage? Or a level term, that pays out a fixed sum? I initially got the former. But then took out another policy for the latter. There's not a great deal difference in premiums. The latter means if, as, I increase my mortgage, e.g. extension or moving up the housing ladder, I don't have to re-jig my policy and pay higher premiums (premiums will go up with a renewal as you get older) as the amount of cover I have in place already covers it and then some. Life insurance isn't like car insurance - it's not really designed to be renewed every year. Get a policy in place and forget about it.

Moneysavingexpert is the site to look at for guidance on what's available. They can direct you towards online brokers that will, should, result in lower premiums than other avenues.

http://www.moneysavingexpert.com/insurance/level-term-insurance
 
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Buildings: Difficult to say, depends on the area and how much cover you want. I've found Halifax to be very competitive on a basic no-frills home+contents policy with zero excess for the past few years. Then again I've never claimed which is the proof of the pudding I suppose.

Payment Protection: Personally I don't bother because we'd have to be pretty unlucky for my wife and I to both lose our jobs and even then by the time you add up the redundancy packages together with savings there'd probably be enough to cover the mortgage anyway. Most people probably have bigger mortgages than us but even so I wouldn't rush into getting cover unless you consider yourself vulnerable i.e. you think it would be difficult to get back into employment or you don't have a large savings pot. My view is that insurance against repayments is (on face value - there are doubtless some exceptions) bad because that is just money being paid out that could have been paying off the debt quicker in the first place.
 
Sorry to hijack this thread, but did a search for similar topics and I'm in the same boat.

Just in the process of buying a house and when budgeting I went to the comparison sites for Building insurance for the new build I'm moving into. The cheapest quote was £85 not including Contents Insurance. The cover was also limited to the rebuild costs of the new house

Halifax are my mortgage provider and I said they could contact me to quote on Buildings Insurance. They've just quoted my £35 a month for unlimited Building Insurance + Contents Insurance + Accidental Damage cover to both Building and Contents!! I'm thinking I've missed something and even went back through the quote with the sales woman.

When I used the comparison site most quotes were around £100 just for Buildings Insurance!!
 
£100 A MONTH for buildings insurance?!? Crikey, that's about what I pay a year for buildings+contents after rebate!

Could possibly be because it is a new build I guess i.e. not all insurance companies will recognise the address so you are getting a very limited set of returns.

My advice would be to go with Halifax but knock off any extras you don't want e.g. are they offering more cover than you need and do you really need accidental damage etc (not suggesting you should or shouldn't take it as that is something you have to decide for yourself).
Also make sure you get the £50 cashback which they pay out automatically 6 weeks after you take out a policy, if you are going via a saleswoman it may not apply so double check that and if necessary run a quote yourself via their website (when I bought a new build I couldn't do that the first year because it wasn't recognised by their system).
 
Ranked1_of_1 said:
When I used the comparison site most quotes were around £100 just for Buildings Insurance!!
Click to expand...

Are you sure this wasnt for a year rather than a month? £100 for the year is about what you should be aiming for. Thats approximately what i pay for a 5 bedder in Oxfordshire (low risk area, but a large house as opposed to a FTB house).
 
Think my insurance this year Buidling+Contents with accidental damage on both and cover out of home for bits n bobs was £230.

Meant to be getting £60 cashback on that but still waiting :(
 
When I was getting quotes for my new build they were generally around £110 per year for building & contents insurance :) Council tax band B if it adds relevance.
 
I pay £44/m for both buildings and contents but have accidental damage on both, full coverage of some expensive individual items, including abroad.
It depends what you want really as i could have easily halved that by going with the cheapest option and not having accidental.
Just make sure you are not under insured for contents and you only insure the building cover for the rebuild cost and not the market price.

EDIT: oh yes and make sure you get cashback by going by a decent comparison site or Quido etc..
 
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