Insurance An Overview

Insurance An Overview



Insurance - An Overview
It is​ true to​ say that these days you​ can arrange an​ insurance policy for almost every eventuality .​
The most common insurance policies that people take out will include buildings insurance,​ contents insurance,​ life assurance and critical illness cover.
Another common insurance policy that many homeowners decide to​ take out is​ Mortgage payment protection insurance (MPPI) - this type of​ policy can cover your mortgage repayments for a​ period of​ time in​ the​ event of​ accident,​ sickness or​ unemployment .​
Buildings Insurance
Every mortgage lender will require you​ to​ have a​ buildings insurance policy in​ place when taking out a​ mortgage .​
If you​ own the​ freehold (the building and the​ land that it​ stands on) it​ is​ your responsibility to​ arrange this insurance .​
If you​ are a​ leaseholder then you​ must make sure that your freeholder has arranged cover on​ your behalf .​
It is​ common for leaseholders to​ pay out for this policy in​ there annual management payments to​ the​ freeholder .​
As long as​ you​ have a​ mortgage on​ your property then the​ lender will have an​ invested interest in​ it​ too .​
The lender will therefore be very keen to​ make sure that you​ have your property covered in​ the​ event of​ fire,​ subsidence or​ heavy storms.
You may decide to​ arrange cover independently or​ through your mortgage lender,​ either way you​ may have to​ provide evidence that you​ have a​ sufficient policy in​ place .​
Most lenders will not insist that you​ take out contents cover for your home although this is​ usually highly recommended .​
Contents Insurance
It is​ very common to​ arrange a​ combined buildings and contents insurance policy - most providers will offer to​ set out a​ policy in​ this way .​
If you​ ever need to​ make a​ claim,​ you​ will receive the​ cost of​ the​ replacements for damaged goods from your insurance company - often with an​ excess although this is​ agreed before you​ take the​ policy out.
An assessment of​ your possessions must be carried out before applying for contents cover to​ make sure that you​ are not underinsured or​ over insured .​
Some contents insurance policies will offer new-for-old cover whereas others may offer simply cash - decide which one best suits you​ before applying .​
Most people will prefer a​ new-for-old policy as​ this will ensure that they receive an​ exact replacement or​ even an​ updated version of​ the​ goods lost .​
In this way you​ will not have the​ hassle of​ shopping around in​ order to​ purchase a​ replacement .​
There are certain factors that can reduce a​ contents insurance premium such as​ having a​ burglar alarm in​ place,​ having smoke alarms installed and even living in​ a​ neighbourhood watch area .​
There is​ a​ wealth of​ contents insurance providers around,​ from traditional insurers to​ banks and supermarkets - always shop around for the​ best cover .​
Mortgage Payment Protection Insurance (MPPI)
Mortgage payment protection insurance can provide cover for your monthly mortgage repayments in​ the​ event of​ accident,​ sickness or​ unemployment .​
MPPI encompasses a​ combination of​ insurances however it​ is​ possible to​ arrange solely one type of​ cover .​
For example,​ you​ may simply wish to​ take out unemployment cover if​ you​ are already covered through work for accident and sickness .​
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While about 60 percent of​ new mortgage borrowers take out MPPI,​ only one-third of​ all borrowers have this insurance - this may be due on​ the​ main part to​ the​ price of​ the​ policy itself .​
As with all other insurance policies,​ it​ pays to​ shop around .​
There are even some mortgage deals that will have free MPPI included however this will only usually cover you​ for six months to​ a​ year.
Again,​ with all insurance polices it​ is​ important to​ make regular reviews or​ your cover in​ order to​ make sure that you​ are not underinsured or​ that your policy has not expired .​
Whenever you​ increase the​ size of​ your mortgage by way of​ a​ remortgage,​ you​ will also need to​ increase the​ level of​ the​ MPPI to​ reflect it.




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