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Index Linking
As house prices seem set to rise every year it is necessary to ensure that your property insurance stays up to date. A house bought five years ago for £15,000 might now cost £300,000 to rebuild if it were completely destroyed. Many companies now offer an index-linked policy whereby both the insured amount and the renewal premium rise each year at the same rate as the average rise in building costs.
Household insurance - contents
Whether you own your own home or merely rent it unfurnished, you will need to insure the contents - furniture, furnishings, clothing and all the other objects indispensable to the running of a household.
To replace the contents of the average home, should they be destroyed, will cost some thousands of pounds, and their insurance is not included in the buildings insurance policy.
The risks covered by most contents insurance policies follow the same lines as the buildings insurance, with the addition of accidental damage to mirrors, fixed glass in and glass tops of furniture and, in many cases, accidental damage to television sets.
The buildings policy will indemnify the policyholder as owner, and the contents policy will indemnify the policyholder as occupier, against all sums which the insured becomes liable to pay as damages in respect of:
(a) bodily injury (including death or disease); and
(b) loss or destruction of or damage to property belonging to third parties.
Household Insurance - Buildings
Your home, whether leasehold flat or freehold house, is almost certainly your most valuable possession. Few of us could face the prospect at having to replace it unaided should it be destroyed by fire. Fortunately, the odds against this occurring are very high, so the costs of insuring against the peril are reasonably low (see page 117).
Most forms of household insurance cover risks of damage to or destruction of the buildings, permanent fixtures and fittings and decorations, and usually extend to include outbuildings such as garages, sheds and greenhouses. Boundary walls, fences, drives... see: Household Insurance - Buildings