Eight things to check in your home insurance
Do you know what’s covered by your home insurance? The most common mistake when taking out insurance is not checking the details of the policy. To avoid unpleasant surprises at the last minute, we detail some points of the contract that you should look out for.
Building cover covers the cost of repairing or rebuilding your home in the event of a disaster. To differentiate it from the contents, a very graphic formula is to imagine that we can turn our home upside down. Everything that would fall down would be the contents, while what would not fall down would be the building.
Keep in mind that the value of the building coverage does not represent the purchase price or market value of your home. Nor should it include the value of the land on which the house or building was built. In reality, it is the amount that would be needed to rebuild the home back to the way it was. This value is known as the “reconstruction cost”.
Home insurance also includes a section dedicated to your “contents”, or your things (TV, clothes, computer, bicycle, etc.). The amount that appears in that section is the amount that the insurance will pay you as a maximum if something happens to your things, so it should more or less correspond to their real value.
The clauses of the policy, under scrutiny
Here are some elements that you should take into account so that you don’t overpay and so that the insurance doesn’t underpay you in the event of a claim:
- Avoid duplication. If your building has insurance, check its coverage, as you will be able to exclude from your policy the elements of the building that are already included in the community insurance. Bear in mind that, in the event of a claim, if an element is covered by both the community insurance and your private insurance, you will not be paid twice.
- Make sure the valuation of the building is correct. If the sums insured are much higher than the value of your home, you are paying for protection that you do not need, as, in the event of a claim, the insurance will only pay for reconstruction, nothing else. On the other hand, if the reconstruction value of your home is higher than the insured sums, the insurer will only pay up to the insured sums, leaving you with a shortfall in your recovery. Therefore, you should adjust your policy to be slightly above the value of your home, but without paying for unnecessary cover. As a guideline, bear in mind that the valuation should range from around 800 euros per square metre for normal flats to 1,300 euros for a detached house.
- Check that the valuation of the contents is adequate. Be aware that insurers impose limits on the individual value of the personal things they cover by default. Normally, your valuables will need additional cover. You need to register them or your insurance will only reimburse you up to the individual limit you have by default in your policy. We recommend that you take photos (or a video) of all your things. To estimate their value, first, make a list of the valuable items and calculate their cost, and then estimate the figure for less valuable items such as clothes and kitchen utensils and round up their value.
- Keep an eye on how glass cover reflects. Glass cover includes everything from windows to mirrors. You should make sure that windows are included among the building covers, while mirrors are included in the contents. Sometimes insurers use this separation to exclude part of the windows from the coverage, so check if they are all covered.
- Consider coverage for aesthetic damage and sanitary ware. Toilets, countertops and other items should be protected by these coverages. Some insurers include these elements as part of the contents, which can be detrimental if the insured capital is lower than the real one. In addition, it can lead to bathrooms and kitchens being excluded from specific coverage, such as aesthetic damage if only building damage is covered and bathrooms and kitchens are considered as contents. You should check that the coverage for aesthetic damage covers the necessary repairs to maintain the aesthetic uniformity of your home after an incident, as insurers play a lot with the limitations of this coverage, especially in bathrooms and kitchens. Make sure that your insurance covers sanitary ware as a building and does not have hidden exclusions. Neither does the clauses regarding aesthetic damage, which must cover a minimum capital of 2,000 euros.
- Make sure that the insurance covers the replacement value of the contents. The actual value is the value that most insurers calculate to replace your stolen or damaged items. It is calculated on the basis of what the same item would cost today (the replacement value) minus the loss of value due to age, wear and tear (depreciation). Hence the importance of the insurance not covering the actual value, but the replacement value, which is the price for which your item (of the same maker and model) could be bought today if it were new. In short, the replacement value is the market price. If your insurance uses the actual value, you will probably want to look for insurance with a similar price but using the replacement value.
- Check that the policy includes legal defence. Without such coverage, your insurance will not offer you the support of a lawyer in the event of a legal dispute. This is one of the first coverages that insurers tend to cut back on in order to offer lower prices.
- Check if the price reflects security features. The fact of installing a security door makes most insurers lower the price of coverage related to burglary. The same applies to security measures such as alarms or grilles. Also, elements such as smoke or water sensors should help you reduce the price of water-related and fire-related coverages. Make sure that these modifiers are included in your insurance if you have them.
We can highlight that it is essential you review the insured capitals and adjust them to the characteristics of your home; check that all the limits are adequate and cover what you expect, and that your insurance includes some modifiers in the price to adjust what you pay each year to the changes you make to your home.
If you want to discover fair insurance for your home and for society, check 11Onze Segurs.
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