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What insurance do I need when I buy a house?

Joel Clyne 15 December 2021

For most of us, taking out a mortgage is the biggest money move we’ll ever make. It’s also one of the most fulfilling – any homeowner will tell you that the feeling of seeing your hard work represented in bricks and mortar is hard to beat.

When you’ve received a formal mortgage offer, you may feel like you’re all set. What could possibly go wrong now? Unfortunately, the answer is – plenty.

Here are some of the forms of insurance you may wish to consider to safeguard yourself during the home buying process.

Buildings insurance

When you’ve just signed away an eye-watering sum for a building, it’s something of a no-brainer to protect that building against eventualities such as fires, floods or even hurricanes (well, you never know!)

It’s not just the exterior shell which is protected, either – buildings insurance usually covers pipes, drains and even sheds. 

Buildings insurance is a must-have for many lenders, so you probably got this sorted before completion. If not – don’t tempt fate and get it secured ASAP.

Home buyers’ insurance 

You may be surprised at how commonly house purchases in the UK fall through for reasons beyond the buyer’s control. 

When this happens, upfront costs such as solicitors’ fees, surveyor’s fees, mortgage arrangement expenses and more come out of the buyer’s pocket, with no hope of recovering them.

Home buyer’s insurance offers a safeguard should this happen to you. Cover involves a one-off fee which will ensure that any upfront money you spend on your home purchase process will be repaid should something go wrong (including ‘gazumping’ – when the seller accepts a higher offer after accepting yours).

Mortgage protection

It may seem a little gloomy, but have you ever considered who’d pay the mortgage if you were to die?

With mortgage protection – also known as mortgage life insurance – you can rest assured that if the unthinkable happens, your loved ones won’t have to take over the mortgage payments or sell the home.

Income protection insurance

Completing on a new home purchase may make you feel invincible, but what if your health status were to change, leaving you unable to meet your monthly repayments? 

Again, we don’t mean to spook you – the truth is that most people never need to redeem an income protection policy. However, it’s worth considering so that if you do experience a prolonged period of ill health that your employer’s sickness policy won’t cover you won’t face losing your home on top.

Contents insurance

Much like the way buildings insurance covers the exterior of the house and its permanent fixtures, contents insurance protects what’s inside. 

Contents insurance covers your stuff should anything be damaged or stolen. It includes most types of weather destruction, theft and criminal damage.

But what’s covered? Most personal possessions you keep in your home can be insured, from computers, freezers, clothing, prams, furniture and TVs. Things like jewellery, cameras and mobile phones may come as optional add-ons.

Do I need to take out insurance when buying a home?

While it’s not a legal requirement, buying house insurance when purchasing a home is a smart decision.

Some forms of insurance – such as buildings insurance – are conditions of many mortgages and aren’t usually negotiable.

The bottom line

Other forms of protection such as home buyers’ insurance are there are a safety net – they offer peace of mind that if things fall through, you won’t take a financial hit you may struggle to recover from.

The bottom line is - insurance is there to protect yourself and your loved ones, and if it happens that you do need it, you’ll certainly be glad you took it out. If you'd like to learn more about our insurances, contact our team today.

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