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By and large contents insurance and building insurance are sold alongside each other and therefore aren’t usually considered separate entities. However there are occasions when a prospective policy holder would do better owning one over the other—of course both cover the unexpected loss of property, so this is meant as a quick and dirty guide as to what’s available to you at your local insurer.
The most obvious thing people usually think of when they think building insurance is coverage for major repairs or a rebuild.
Though the necessity for a complete rebuild is unlikely, there are two options available when choosing cover for this possibility. Insurance companies usually give the option of tying the cost of a rebuild to either the current market price of your home or the total cost of a rebuild. Obviously in the last couple of years the first option has been popular but over the last couple of years, when most home’s market value has reduced, this has been proven to be a bit of a gamble. The latter option, though more conservative, is ultimately safer but can also be different on a house to house basis so make sure you discuss your options and get the advice of your insurance agent (or multiple insurance agents) before pulling the trigger on this one.
Most policies will cover the cost of rebuild or repair for damages incurred by fire, subsidence, storms, falling trees, animals (think wood-worm) or an out of control driver crashing through the wall. Some things like natural flooding have to be provided for by purchasing additional coverage—though apparently no insurance is available for damage sustained by acts of war (including nuclear war). However, rumor is that some insurance companies do provide some amount of coverage for damage from zombie apocalypse! Make sure to check with your insurance agent.
Additional options can often insure against loss, covering alternative accommodation when the policy holder must live off-property during repairs, fumigation, etc.
Contents insurance basically covers items on the property that aren’t nailed down like curtains, carpets, electronics, washing machines and personal effects. Insurance will cover the loss of this stuff if it is destroyed (by zombies for example) or stolen (by clepto-zombies) but usually only to a point. Excesses usually range between £50 and £500. If you have something really valuable (like a painting, giant diamond, or gold bricks) you will probably have to list these as items of high value. Again check with your insurance agent.
Usually people will purchase both policy types at point of sale if they are the home owners as well as the occupants. If you are a tenant you will only really need contents insurance as you don’t own the building (so what do you care?). Equally, landlords will only ever need building insurance. If you are thinking about buying insurance make sure you understand your needs so that you don’t end up walking away paying for something that doesn’t provide the full cover you need.