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The Insurance industry in the UK ranks in the top three largest in the world and in the UK alone the average home owner spends over ￡2,000 on house insurance and contents insurance. This article will cover some of the major issues that people face when taking out house insurance and how to avoid major house insurance pitfalls.

For those who aren’t aware, House insurance covers the owners private house for the financial cost s against a range of eventualities (see below) . As a policy, it combines a range of personal insurance protections, which generally include damage or loss to one’s house, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the house owner, as well as liability insurance for accidents that may happen at the house.

A major issue that people fail to take into account when taking out house insurance is to ensure that the policy covers the full cost of the rebuild, not just the market value. It is also worth taking into account that similar houses in different neighborhoods will differ in market value but actually cost the same in terms of rebuilding costs (this is obviously dependent on the housing market and should be addressed when taking out a house insurance policy). Henceforth it is highly advisable for anyone looking for house insurance cover to explicitly ensure that the terms of the house insurance policy cover the entire rebuilding cost and take into account the market value fluctuations.

The exact cost of house insurance usually is dependent on what it would cost to replace the house and what extra riders (extra items or properties to be insured) are attached to the policy. The house insurance policy is a long-term contract, and explicitly lays out in what circumstances insurance companies will and will not pay out in. Acts of God (Hurricanes, Land-Slides etc) or damage caused by acts of War are generally not included in basic house insurance deals but can be included if there is a significant risk of these circumstances arising. The levels of this risk obviously affect the initial price of the house insurance policy.

The house insurance terms could also provide the home owner with different accommodation if your house is deemed unsafe to live in after the damages occur. Despite it being one of the more appealing issues it is important to make sure that anyone taking out the house insurance policy doesn’t just go for the cheapest price and looks for features that are specifically tailored for the area you live in. Use price comparison sites to ascertain what insurer will offer you the best deal.

House insurance policies can include cover in the event of an injury to a person whilst in your house. In addition to this certain house insurance policies could also provide cover and absolve you of legal liability if someone where to be injured.

As well as the Outside structure, house insurance can also include fixtures and fittings in the house including bathroom appliances, fitted kitchens and large personal furnishings i.e. lighting and fireplaces. This is usually determined if the fixture can be removed and taken to a new house.

House insurance policies will usually include outer structures such as garages, patios and garden sheds but might not cover boundary walls, fences, gates, paths, drives, hot-tubs and swimming pools. Check the specific policy at the time of taking it out.

Most mortgage lenders stipulate that the house owner takes out a house insurance policy as a pre-requisite of the loan to protect the lender if the house in question was damaged beyond repair. It is also another condition of a house insurance policy that anybody with significant interest in the property should be included on the policy. This will only be waived if the value of the land exceeds the amount of the mortgage balance. In a case like this even the total destruction of any buildings would not affect the ability of the lender to be able to foreclose and recover the full amount of the loan.

A recent study has indicated that shopper confusion about the precise financial cost of the house insurance policy could be costing the countries home owners millions of pounds every year, with mortgage lenders cashing in on uncertainty over house insurance and therefore exploiting the consumer. The findings of the research indicated that 39% of house owners purchased their house and/or contents insurance through their mortgage provider in conjunction with their mortgage at more cost and didn’t consult any other providers, which could have offered a better deal.

House insurance exclusions:

Any house insurance policies will be invalid if any of the following occur ?Falsified information. ?Lack of maintenance – negligibility is unlikely to be covered. ?Failure to install security systems. ?Failure to carry out repair work on previous claims. It is also Also bear in mind that it can sometimes make more sense to pay for relatively inexpensive repairs yourself than make claims on your insurance e.g. a cracked window. This will allow you to build up your no claims bonus.