- 15 Feb 2021
- Reading time
- 4 minutes
What is House Insurance?
House insurance is a form of property insurance covering loss and damage to a person's home, including furniture and other items in the house. It also offers liability insurance against accidents on the property. The policy usually covers internal damage, external damage, loss or damage to personal effects, and injuries that occur on the property.
Every house insurance policy has a limitation of liability that determines how much coverage the insured person will have in the event of an unfortunate incident. If you want to get homeowners insurance, you should check BritainReviews which provides independent genuine reviews regarding various insurance companies spread across the whole of Britain.
If you get any recommendation of an insurance company, you should see reviews on BritainReviews to get benefit from other customers’ experience. And if you're looking for more information about insurance types. Have a look at this article.
HOUSE INSURANCE VS HOME WARRANTY
While the terms may sound similar, house insurance in the UK is different from a home warranty. A home warranty is a contract that provides for the repair or replacement of home systems and appliances such as stoves, water heaters, washers/dryers, and swimming pools. These contracts usually expire after a particular time, usually 12 months, and do not need to be purchased by a homeowner to qualify for a mortgage.
If you want to cover gaps in your house insurance, you can opt for a home warranty. The home warranty is optional and renewable.
HOW DOES HOUSE INSURANCE WORK?
Fire, theft, accidents are the types of threats that can make you lose sleep if you do not have house insurance coverage. Fortunately, a homeowner's policy covers damage to your home and personal property for a variety of reasons. The personal liability portion of a homeowners policy provides cover, for example, if your brother-in-law slips on your stairs and injures your policy will cover medical bills depending upon your coverage limit.
WHAT IS NOT COVERED BY HOUSE INSURANCE?
While the house insurance covers most of the scenarios in which a loss could occur, some events are typically excluded from the policy, e.g. natural disasters or other acts of God and war affairs.
Mold has been a very controversial topic in the home insurance industry for decades. Between the late 1990s and early 2000s, the insurance industry changed the wording of house insurance policies to limit mold coverage following an increase in mold insurance claims linked to homeowners' water damage claims. In most cities, house insurance companies can exclude mold from coverage unless the mold was a prime objective of the policy.
TAXES AND HOUSE INSURANCE
In general, house insurance is not tax-deductible, as are premiums, although your premiums may be included in your mortgage payments. It means that unfortunately, you cannot incorporate payments for home insurance- including fire, theft, and comprehensive insurance- or property insurance on your tax return.
House insurance offers protection against possible damage to the house. Besides, it usually includes a homeowner's driveway, gate, garden shed, and garage. Mostly, house insurance premiums are not tax-deductible.
In specific cases, however, they can be fully or partially tax-deductible as business expenses.
For example, the tax will be deductible if you are a landlord. If your home or property was damaged in a federally recognized disaster, you may be able to deduct uninsured financial blows that your family suffered due to disaster. Mostly, house nsurance is a non-negotiable issue for most mortgage lenders.
What if you live in a flood or hurricane zone or an area with an earthquake history? You want a driver or an additional policy for earthquake or flood insurance. There is also backup sewer and sewer cover that you can add and even identity recovery cover that reimburses you for the costs associated with being the victim of identity theft.
How much is house insurance?
According to an analysis, the average cost of insuring homeowners in 2020 was £1,631 per year. However, prices can be significantly higher or lower, based on your location and insurance coverage. In most cities, your income can also be a factor.To determine the price of your house insurance, insurers usually take into account:
- What it would cost to rebuild your home
- Your home's age, condition, and other characteristics
- Distance from home to the nearest fire hydrant
- Fire protection class of your city
HOW TO SAVE HOUSE INSURANCE?
If your premium seems too high, there are simple ways to save on house insurance. For example, many insurers offer a discount for bundling your home and car insurance. You may also get a lower rate on community security features like burglar alarms and deadbolt locks. And it is always a good idea to shop around and compare house insurance quotes to make sure you are getting the best deal. Before you stress about the policy's cost, keep in mind that the coverage will bring you a significant profit. The premium you pay is a fraction of the cost of building your home from scratch and replacing your belongings.