Home insurance: an understandable guide

If you have bought a property with the sole intention of renting it out to tenants, you will need to make sure that you have residential buildings house insurance in place, as this is something your new tenants can ask to see proof of.

Most policies will have a minimum £1,000 subsidence excess in place, as this is usually the most expensive unforeseen circumstance, but other incidents could have pricey excesses too, so always read through your policy documents carefully. You may think that you can live without this insurance, but if you have a beautiful house, such as this one from KSR, could you really bear to see it sold or demolished if you can't afford to fix it?

Rather than only insuring the structure of the building you live in, you will also want to give a lot of thought to insuring your possessions inside it, as in the case of a fire or any other incident, you might need to replace all your furniture and belongings. 

Most people look for a buildings and contents policy that looks after the structure of the house and everything inside it and though this can be an expensive way to buy house insurance, your policy should reduce quickly if you have a number of incident-free years. 

Environmental liability insurance means that in the event of a natural disaster, the cost of rebuilding or restoring your home will be covered and that you won't have to fund it all yourself. House insurance doesn't get much more comprehensive than that!

Insurance such as this usually covers things such as land pollution, water damage, air damage and biodiversity issues and though you might think this is a little specialist for your needs, if you live close to any bodies of water or somewhere that is prone to high winds, you would be sensible to look into at least adding some protection of this kind to your normal insurance policy. After all, if your house flooded tomorrow and knocked out your bedroom wall, would your existing policy pay to repair it? 

If you are a landowner, regardless of whether you have built a property or not, if members of the public encounter your land and have an accident, you could be liable to pay huge damages to them.

Regardless of what you are using your land for, be it a grazing field, property location, a private road or anything else, common law states that you are responsible for people's safety when they are on it. It seems a bit unfair doesn't it, but liability insurance will protect you against this. Standard levels of cover are for £1 million, £2 million and £5 million but for dangerous areas, up to £10 million of cover is available. Yikes!

You may have thought that buildings and contents was all the house insurance covers that you would need, but how wrong you are! Even when you have the structure of your home and the contents therein covered, you might still find it wise to take out legal expenses insurance, just in case anything ever goes wrong. 

This cover can be exceptionally helpful in the event of building works, meaning that any extensions or development works that you pay for but are not happy with, can feasibly be refuted in court if you feel your tradesmen have misrepresented their skills or what they were going to build. Though you never want to use this insurance, it's great for peace of mind to know that it is in place!

In an ideal world, we will all live super long lives and have houses and savings to leave to our families when we pass away, but in the event that you should die before your mortgage is paid off, residual debt house insurance will ensure that your outstanding payments are completed, leaving your family with nothing to worry about. It might seem a little morbid to think like this, but that's why mortgage holders should always have life insurance in place as well!

For more homeowner inspiration, take a look at this Ideabook: 7 Vital Things You Need To Know Before Buying A House.