Insurance, why you need it?

Insurance cover

Everyone needs insurance cover. Some you have to buy and some we provide. Find out a little more by reading this article.

Building insurance

The management company of the freeholder for your building will insure the actual bricks and mortar of the building. This is called the building insurance policy. Imagine being able to pick up your building and turn it upside down. What falls out is not covered on this policy and what remains would normally gain cover.

This policy does not cover maintenance items such as things that need repairing or have worn out. It covers for accidental claims such as water leaks and fires. There is the normal subsidence and storm damage.

Terrorism insurance

This sounds awful but every building should have cover. It’s not only about someone causing an act of terror in the apartment but also outside. There could be a period when you couldn’t access the site or have damage to the building from an act. None of this would be covered under the normal building policy.

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Contents insurance

You need contents insurance. This is not just about being burgled. Imagine a water leak from above which damages your contents. These are not covered as part of the claim for the water leak under the building policy.

Also check if floorings are covered as the main anomaly to building cover is that it excludes carpet (insurers base this as contents as it can be taken away) and sometimes laminate flooring if it was not the original laminate flooring installed by the builder is excluded.

When you take out your contents insurance make sure the insurers know that the building already has buildings insurance and you do not need this element. Insurance companies seems to often not understand this, and this causes the policy costs to be higher than they should be.  

Landlords insurance

This only applies if you own the apartment / house and rent it to a tenant on a shorthold tenancy basis. This is an insurance policy for those of you who own an apartment or house but rent it out to a tenant. Often you’ll have some contents but these policies have other benefits such as rent guarantees, etc. Each policy may vary so check the terms and conditions well.

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Insurance excess

An excess is when the claimant has to pay the first certain amount of each claim made. You can check the policy to find out the exact amount of the claim you would have to pay. Also check as different claim types often have different excesses so water leaks may vary from broken windows.

Mitigating losses

You must be able to prove to the insurance company you took all steps to keep the claim to a minimum. If there is a water leak you are expected to contain it as much as possible with bowls / buckets etc. Leaving it for a few weeks would not be acceptable and could cause the claim to fail.

Again if you have a leak causing damage below you may be liable for the full cost if you don’t act quickly.