Home insurance is another one of those policies which is not compulsory, but can be hugely expensive should you not take it out and something happens to your property.
There are several different types of home insurance, with buildings cover and contents cover the two main forms. Most mortgage companies will insist on taking out buildings cover, as this will take care of the costs of rebuilding the house in the case of a fire or other severe damage.
Buildings insurance will also cover you should something unexpected happen to your house, like a tree falling through the roof, or a water pipe bursting and causing damage.
If you own the house outright, buildings insurance is not compulsory – but should a fire destroy the house, you will lose everything without this form of cover.
Contents insurance is a more widely-used insurance cover, as this can be taken out by people who rent a house as well as those who own their houses.
Contents insurance will cover all your possessions inside the house in the event fire or water damage, along with theft. Certain restrictions will apply on all policies, so make sure you read the small print when you take out the policy.
Contents cover requires you to estimate the value of your belongings, which is something nearly everyone tends to underestimate. It is thus wise to use the calculators provided and spend a good period of time working out exactly what you own, so that if the worst happens, you know you won’t be in for more bad news when you realise you can’t afford to replace everything.