A recent article in the Guardian highlights a potential hole in your home insurance when it comes to cover for burst pipes in the home. The article describes the scenario of not having contents cover for your property and the potential impact this can have should you have an escape of water that damages either your property or your adjoining neighbours property.
Fortunately the outcome on the story was favourable – but it’s a reminder that with home insurance, things aren’t always as straightforward as you might think. The Financial Ombudsman Service, which had to intervene in this case, said the distinction between buildings and contents cover “is often not fully understood”. It added: “Consumers can easily believe they are covered for all eventualities when in reality they are not.”
Some mortgage suppliers will make this type of insurance compulsory when you take out a mortgage with them, to cover their loan. Having both buildings and contents insurance is highly recommended to protect you against unforeseen circumstances. Virtually every home in the country will have this type of insurance just for that reason, and it could end up proving to be very costly if you do not take the cover out. Cover is varied so you need to be proactive and understand the difference and the type of cover you require for your property based on its contents and its location.
Here at Tempest, we help our customers by liaising direct with insurance companies. We often find that people are under insured for their contents and when the worst happens, they are left with the difficult process of repairing their home plus the financial implication of which they thought they were covered for.
We always recommend that you have both buildings and contents insurance. You should check your cover annually to make sure you have the correct cover for your requirements to avoid being in a costly scenario.
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If your pipe bursts and causes damage to a neighbour’s house, your policy might not pay out if you have bought home rather than contents cover.