Guide to home emergency insurance
In order to take out a mortgage, buyers are required to take out home insurance. However, they are only required to take out buildings insurance which protects the actual structure of the property. Contents insurance is an optional extra for homeowners and tenants.
Both of these policies can be extremely beneficial, but there is a third type that tenants and homeowners should consider. Home emergency insurance is designed to protect against electrical, plumbing, heating and in some cases, storm damage. If any of these systems were to break down, it could cause a lot of stress, discomfort and financial trouble.
What does home emergency insurance cover?
As with any type of insurance, emergency home insurance policies differ between insurers. The amount you can afford to pay each month will also determine how much cover you receive. Typically you will be protected against burst pipes, boiler breakdown, hot water, security problems, electrical failure, and roof damage.
The above generally come as standard, though there are some extras which may also be offered. These include appliance breakdown, pest control and lost keys. Comprehensive cover will also provide you with additional accommodation if the home has a major problem that needs to be repaired.
Boiler breakdown is the only thing that doesn’t always come as standard. Due to the costs involved in repairing a faulty boiler, many insurers provide cover at an additional cost.
Do you need home emergency cover?
Home emergency cover can provide peace of mind and is highly recommended. However, before taking on an additional policy, you should check whether you are already covered.
While it is rare, some insurers do provide emergency cover within their standard insurance policies. The cover is typically restricted, but it does cover some of the most common emergency situations. Be sure to check exactly what you are entitled to with your existing cover.
It is also possible you might be covered by manufacturer guarantees. Take the time to read through any guarantees you may have and what they cover. Some banks also provide emergency cover with a certain type of account, so it is advisable to check whether you have cover from any other source before applying via an insurer, as this can save you money.
How home emergency insurance works?
Once accepted for the cover, you will receive a number you can ring in the event of an emergency. The insurer will then send out their own approved tradesperson who will handle the emergency for you. It is not usually possible to claim the costs back from a professional that you call out yourself and it is unlikely to be covered if you do.
The selected tradesperson will usually arrive within 24 hours. Again, this will depend upon the policy. A claims assessor might be sent out to ensure a claim can be made.
Most policies will require an excess to be paid before they will pay out. This means you will need to pay a set limit towards the repair costs before the insurer will step in.
The size of the excess affects what you pay for the policy. The higher the excess, the lower the insurance will be. Some insurers have an excess of £500 before they will help. This is a lot of money to find in the event of an emergency. Always consider the excess before signing the agreement.
How much does home emergency cover cost?
The actual cost of emergency home insurance can differ considerably. Individual policies will cost anything from £6 to £10 per month for basic cover. Comprehensive cover will be a lot more expensive, ranging from £20 to £40 per month.
Importance of the small print
Most people skip over the 'small print' before they sign a contract. It can be tedious going through long blocks of small text. The trouble is that the small print contains vital information about the policy including what it does and does not cover. Hidden fees may also be included.
The most important thing to look for in the small print is restrictions in the policy. Boiler breakdown may be included, but only in the winter months. If it breaks down in spring or summer, your insurer might not pay out. There may even be restrictions on how many call-outs you can have during the policy period.
You may be required to have had the policy running for a certain period before you can make a claim.
Familiarise yourself with all the restrictions and terms of the policy before you sign. Emergency home insurance can be extremely helpful, but it can also cause a lot of stress if you don’t end up with the right amount of cover to fit your needs.