When purchasing a home, it is easy to forget all the potential problems that present themselves through such a large responsibility. However, it is sensible to take the correct precautions to avoid finding yourself in severe financial trouble, should your situation change. The best way to do this is to ensure all your finances are well documented, that you have made and recorded clear plans for different eventualities, and that you have the relevant insurance.
Having good buildings insurance is essential for any homeowner. Buildings insurance typically covers a range of damage that could occur to your property, for example, subsidence, fire damage or flood and storm damage. It should provide its customers with full coverage should the entire property need to be rebuilt. However, buildings insurance will usually only cover the physical structure of your home, not your possessions as well. For this, you will need contents cover.
Contents insurance is, as it states, designed to insure the contents of your home. It will usually cover incidences such as replacement following theft or fire, but also damage to carpets and possessions following washing machine or radiator leakage. Replacement is usually ‘like for like’. Many providers will offer a discount if you purchase both buildings insurance and contents insurance through them.
A Mortgage Payment Protection Plan accounts for an unexpected situation, where you may not be in a position to repay your mortgage. This may be for a number of reasons, for example, if you are made redundant or become unemployed, if you have an accident, if you become ill, if you become responsible for somebody who is ill. There is also the option of having your mortgage fully paid off should you become critically ill. Although this may seem an unlikely scenario, careful planning, including insurance and a will, could prevent problems later on.