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Comprehensive insurance cover can save your finances from going under
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The Independent Online

With yet more storms expected this weekend, the misery already heaped upon homeowners struggling to cope with flood damage is set to intensify.

With yet more storms expected this weekend, the misery already heaped upon homeowners struggling to cope with flood damage is set to intensify.

While some people have had to get used to flooding over the years because their homes are situated in low areas close to rivers or the sea, this time the widespread nature of the floods, coupled with storms and gales, means that many more of us have been affected.

The bad news is that with global warming the situation is going to get worse. So what can we do to ensure that we can deal with whatever nature - or man for that matter - throws our way? The answer is comprehensive insurance which can cover us against all sorts of disaster, natural or man-made. Sure, you have to pay for it but if you shop around and take advantage of competitive pricing, you should be able to find a good deal.

"The first thing you need to consider is whether you have enough cover," says John Castagno, managing director of general insurance at Legal & General. "To get real peace of mind you need to consider whether you have enough rebuilding cover on your house, for example, and to make sure you get this, you need to check your cover on a regular basis."

Buildings and contents insurance for the home are vital. Buildings insurance is compulsory when taking out a mortgage and covers structural damage to homes and outbuildings, which means your garden shed should be covered. It also includes fixtures and fittings, such as baths and toilets. But check the small print of any policy as gates, fences, boundary walls, paths and drives probably won't be covered.

Buildings insurance covers damage by subsidence, landslip, falling trees, storm and flood but an excess - where you have to pay a set amount when making a claim - usually applies. Check what this is when you take out the policy.

"People who say they can't afford a comprehensive package may find that if they opt for a higher voluntary excess they will get lower monthly premiums," says Mr Castagno. "A lot of insurers have a £50 excess, for example, but some customers are happy to pay the first £100 or £150 to bring the premium down." He estimates that if you offered to do this you could reduce your premium by 5 per cent a month, but it is only worth doing if you feel comfortable with the higher excess.

The sum insured must be for the full cost of rebuilding the house. This must be calculated accurately, otherwise you will face a shortfall if you have to make a claim. The market value and council tax band variations have no direct relationship to the rebuilding costs: the Association of British Insurers has an information sheet which gives you advice on how to work out the rebuilding cost of a standard building (www.abi.org.uk). Or you could ask a member of the Royal Institution of Chartered Surveyors to provide a professional rebuilding cost assessment.

Contents insurance is not compulsory - which is why some householders don't bother with it. But if your home is flooded or there is a fire or you are burgled, it can cost thousands of pounds to replace furnishings. Contents insurance includes everything which you could take with you if you moved including furniture, electrical goods and personal items. This is why your policy should be reviewed in case you need to increase your cover to take into account any new belongings you have.

Home contents policies cover loss or damage to property through fire, theft, lightning, escaped water from tanks or pipes and leaking oil from heating systems. The good news is that flooding is a standard part of home contents and buildings cover.

Accidental damage is worth considering as an extra; this covers breakage to contents such as televisions, videos, home computers and audio equipment.

"Most people tend to go for fuller cover now," says Cathy Parker, head of home claims at Churchill. "You can get accidental damage for not much of an increase in your premiums."

"All-risks" cover is also worth getting; this covers accidental damage or loss of valuable items when you take them out of the home, including jewellery, cameras and sports equipment. "The lifestyle issue is important here," says Mr Castagno. "People with specific items to insure, such as stamps or golf equipment, need to make sure whether any exclusions apply, and if so, what they are. You need to know the circumstances under which these items are covered. You should make sure that you discuss this with your insurance company."

Car insurance is also crucial; not only in case of an accident but also for theft, flooding or a falling tree damaging the vehicle. It is an offence to drive a car without insurance as the law requires that all motorists are insured against their liability for injuries to others and damage to other people's property. Such cover is third-party, to which you can also add fire and theft - or you can opt for comprehensive cover.

Around two-thirds of all motorists opt for comprehensive, which includes third party, fire and theft, but also accidental damage to your car, personal accident benefit, medical expenses and loss or damage to personal effects in the car, up to a stated limit.

"We are finding now with the floods that a comprehensive motor policy is useful," says Churchill's Ms Parker. "In a storm or flood situation your car's repairs are covered, subject to policy excess. In severe floods, we would render the vehicle a total loss and pay for a replacement. But if you only had third party insurance you wouldn't be covered. "

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