Home insurance Updated:
Buying your first home is full of stress – it often seems as though there is an endless list of things that need to be done or purchased in order to secure that dream home, so it's no wonder that things like home insurance get knocked down the list of priorities. However, leaving your new home without building or contents insurance could be a costly mistake.
A survey carried out by The Co-operative Insurance discovered that nearly half of first-time buyers (47%) fail to budget for home insurance costs when planning the purchase of their new home. As a result, some aspects of home insurance are forgone altogether, while others are purchased late or incorrectly – something that could cause huge problems both before and after the sale.
Much of this seems to stem from a lack of understanding about home insurance and its necessity. For instance, the survey found that a third (34%) of those questioned didn't know that having buildings insurance in place was a minimum requirement of their mortgage offer, while one in six (17%) secured their building insurance late, which could have delayed or even forfeited their purchase altogether.
Worryingly, even those who did factor home insurance into their budget failed to prepare fully, with 13% admitting to underestimating the costs involved. The survey also found that 53% of respondents were guilty of guessing' vital details when collecting home insurance quotes, with a third (31%) of this number going on to purchase the cover without correcting these details. This is risky, as Caroline Hunter of The Co-operative Insurance points out, for it can invalidate a policy and render it worthless.
The research also found that failing to budget and take the costs of insurance into consideration meant that contents cover was often left completely by the wayside. Two-fifths (41%) of respondents admitted to owning no contents cover, with more than a quarter (29%) citing the reason as being a lack of money while 24% didn't think they needed it. Even those who did arrange cover left their possessions open to risk, with 19% not securing cover before they had moved all of their belongings into their new house. Overall, 28% of those who bought their first home in the past five years still don't have any form of home insurance in place.
"As many first-time buyers are likely to have previously rented a property, their landlord will have taken care of their buildings insurance and so, they may not be aware of their responsibility to have this in place when becoming a homeowner," explains Caroline Hunter. As a result, "too many individuals have an inadequate level of cover or are leaving themselves exposed by purchasing insurance too late in the buying process, or worse, not at all".
If you are in the process of gearing up to buy your first home, don't make the mistake of underestimating the importance – and the cost – of good home insurance.
To help you plan for this important expenditure, and to find the most cost-effective deals, take a look at our home insurance comparison tool. This will help you to get an idea of how much money you will need to reserve to purchase buildings insurance and, preferably, contents insurance. Talking to an insurance provider or collecting quotes will also furnish you with the information you need to get an accurate quote and sufficient cover.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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