Are you covered if you spill paint? Or if your pet scratches the furniture?
And do you have to take out insurance with your mortgage provider? There's a lot of confusion surrounding home insurance. We hope to dispel some common myths.
Understanding the finer points of home insurance can be difficult, and most of us would probably admit that we don’t take enough time to read the small print.
But it’s important to know exactly what you’re covered for – and what you’re not covered for – to avoid getting a nasty surprise when you try to make a claim. Here we sort the fact from the fiction…
Myth 1: Your home should be insured for its market value
The amount of buildings cover you need should be based on how much it would cost to rebuild your home from scratch, not the price it could sell for on the market.
The cost of rebuilding is almost always lower than the market value because you don’t have to account for the value of the land. The exception is if you live in a property where non-standard materials may be needed to rebuild it.
If you have recently had a Homebuyer's Report carried out when you bought the property, you can usually find the rebuild cost in the report. Alternatively, you can use the ABI calculator.
Myth 2: Your most valuable items are covered
Even if you have contents insurance, it doesn’t necessarily mean that every individual item will be covered. Most policies specify a maximum level of cover for a single item, for example £3,000 with our Essential, Plus and Premier cover levels.
So, if you have something that’s worth more than the single article limit, such as an engagement ring or antique ornament, you’ll need to take out extra or specialist insurance to financially protect it.
Myth 3: You won’t have to pay anything if your claim is accepted
Truth: When you take out an insurance policy, you will usually see the term ‘excess’ on the form. This is how much you’ll pay towards a claim before your insurer pays out. There are two types of excess:
Compulsory is a fixed amount set by your insurer
Voluntary is the amount you agree to contribute yourself. The higher it is, the lower your premium is likely to be.
Make sure you’re clear on how much excess you’d be required to pay if you need to make a claim so you’re not taken by surprise.
Myth 4: You're automatically covered for accidental damage
If you spill a pot of paint on the carpet or put your foot through the ceiling while doing DIY, you might assume you can claim for any damage caused on your home insurance.
While many policies provide a certain level of cover against accidental damage as standard, they will usually only cover things like breakages or damage to mirrors, glass and home entertainment equipment. You can pay a bit extra to extend the accidental damage cover for most other things, although you may need cover under both buildings and contents policies.
Myth 5: Your belongings are covered outside of your home
If you carry valuable items around with you, such as laptops, musical instruments or sports equipment, you might find it reassuring to have them financially protected when you’re out and about.
However, you can’t assume that contents insurance will automatically cover your belongings against loss or damage outside the home. You may need to take out personal possessions cover as an optional extra. Some policies, such as John Lewis Premier Cover, do include personal possessions cover up to £2,500 with a single item limit as standard.
Myth 6: You must get insurance from your mortgage provider
Many people, particularly first-time buyers, think they have to get home insurance from their mortgage lender.
While buildings insurance is a condition of your mortgage, it’s up to you who you buy it from. Your lender may recommend its own insurance scheme, but it is often advisable to shop around for a better deal. You will have to provide details of your insurance to your lender though.
Myth 7: You won't be able to get insurance if you live in an area with a history of flooding
If your home is in an area that is prone to flooding, the cost of insuring it can be very high. However, a joint scheme by the Government and the insurance industry called Flood Re is helping to bring down premiums for many people living in high risk areas.
It's expected that the scheme will benefit more than 350,000 households that might have previously struggled to get insurance against flooding.
Myth 8: You can make a claim if your dog rips the sofa to shreds
If you’re a pet owner, you’ll be all too aware how unpredictable animals can be at times. This can lead to all kinds of accidents, including breakages and damage to furniture.
While simple breakages are often covered, many insurance companies won’t pay out for damage caused by chewing, tearing, scratching or fouling by animals. They also are unlikely to provide cover for damage caused by insects and vermin.
Myth 9: If your property has subsidence, you won’t be able to insure it
No homeowner wants to hear they've got subsidence as it means the ground has shifted, which can cause foundations to sink. It's a problem typically caused by poor drainage, clay soil or trees absorbing water from the ground.
Most buildings insurance policies will cover you if you haven't made a claim for subsidence in the past, but you might find it difficult to insure a property with a history of subsidence. However, there are specialist brokers who can help you arrange cover.
Make sure you're aware of the excess as it may be considerably higher than the standard policy excess.
Myth 10: Home insurance covers damp and mould damage
Damp and condensation can affect any home, particularly older properties that don't have a damp-proof course. It can damage walls and plasterwork, and cause wood to rot.
Most standard home insurance policies will not cover you for damage caused by damp and condensation because it typically falls under the general wear and tear exemption rule. This is especially true of rising damp, which tends to always be associated with a gradual decline in the condition of the building.
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John Lewis Finance and John Lewis Insurance are trading names of John Lewis plc. Registered office address is: 171, Victoria Street, London, SW1E 5NN. Registered in England and Wales No. 233462.
John Lewis plc is an appointed representative (Financial Conduct Authority number 416011) of Royal & Sun Alliance Insurance plc. John Lewis Home Insurance is underwritten by Royal & Sun Alliance Insurance plc (No. 93792). Registered in England and Wales at St. Mark's Court, Chart Way, Horsham, West Sussex, RH12 1XL. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 202323). Calls may be recorded and monitored.
John Lewis plc is an appointed representative of Covea Insurance plc. Its Financial Services Register No. is 416011. John Lewis Specialist Home Insurance is underwritten by Covea Insurance plc. The Covea Insurance Registered office address is: Norman Place, Reading, Berkshire, RG1 8DA. Registered in England and Wales No 613259. It is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Its Financial Services Register No. is 202277.