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Buildings Insurance: an Essential Investment. 

It is very important to insure your home, as it is usually your biggest investment. Not only that, but it is very likely that you will be paying a mortgage on it. If for example the house burnt down, you need security against the mortgage, otherwise you will be massively in debt: the mortgage lender still expects you to repay what you owe them, even if the house it was secured on no longer exists. 

The house burning down is an extreme case, and most mortgage lenders insist that you have some form of house insurance in place. After all, the principles of responsible lending dictate that you should be able to borrow only what you can comfortably afford, and if you have a massive mortgage to pay on a property that no longer exists, that is not responsible lending. You will usually be able to purchase home insurance from your mortgage lender, and indeed it is often the case that home insurance comes as part of the mortgage package, as an additional extra. 

Yet you are not obliged to accept your mortgage lender's insurance package, and very often you will get a cheaper deal and better quality of cover from a different provider such as RIAS or the Co-Op. With every type of insurance contract you should always read the small print to ensure that the things you want covered are indeed covered. Standard home insurance policies, depending on how much you pay, will include building, contents or both. 

It is most advisable to have as a minimum buildings insurance, which will cover you, even for the extreme circumstance of it burning down, as well as other things like frost damage caused by burst pipes, or damage caused by burglars. In addition, many people also have contents insurance, which covers as the name suggests all your possessions and fixtures and fittings. You should keep as complete and up to date an inventory as possible.  You must state what is inside the property, as if you were burgled and the item was absent from the inventory then the insurer would not normally pay out. Contents insurance may also cover you for accidental damage to fixtures fittings, although be reminded that an excess usually the first 100 or more on any claim is usually payable to protect insurers from frivolous claims on both home and contents insurance.

 



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