When you have an extension or conversion built on your property you must remember that, in most cases, your home insurance premium will increase due to increased size and value of your home.
If you are within the term of your current insurance, contact your insurer to check what the situation is with regards your extension. Your building insurance premium will most likely increase, but don't forget also that the value of your contents may also increase - you now have extra furniture, carpets etc. It is often not cost effective to change insurers mid-term of a policy.
If you are coming to the end of your current insurance term then ring around several insurers, as well as your current insurer, to see whether they can provide better cover at the same or lower price. You can often use the renewal quote from your current insurer as a bargaining point for getting a good deal.
Take a look at our Insurance Links page for suppliers of competitive house insurance, many with online quoting and buying.
When obtaining a quotation from an insurance company they will ask you for the re-building cost of your property as the Building insurance premium will be based on this amount. This is not the same as the current value of your property. Remember, if your house had to rebuilt it would not be necessary to re-purchase the land it sits on. Therefore, in most cases the re-building cost of a property can be less, sometime considerably less, than the current market value of your house.
It is very difficult to give an accurate figure to the re-building cost of a property. Most insurance companies can give you an idea based on where you live, the size of your property and whether or not you have a garage and double glazing. If you would like to get an estimate of the re-building cost of your current property NFU Mutual have an excellent facility on their website called "Buildings Calculator". Click here to visit the house insurance page of their site and click on the "Buildings Calculator" on the right hand side of the screen.
The value of the contents of your home is also a very difficult
thing to judge accurately. Most people under-estimate the value
of their contents as they forget such items as carpets, curtains,
kitchen units and other general furniture. Many insurance companies
offer insurance for a catch-all amount, e.g. £60,000. However,
if you live in a small property this may be well in excess of your
requirements and you are, therefore, subsidising other peoples insurance.
However, most insurance companies will allow you to specify an amount
which should then cover all the contents of your home.
NFU Mutual, again, come to the rescue here. They have a Home Contents
Calculator, which will help you calculate the value of the contents
of your home in a fun and interactive way. Click here
to visit the house insurance page of their site and click on the
"Home Contents Calculator" option on the right hand side
of the screen.
Always check with your insurance company whether they provide "new
for old" cover or just "replacement". If you had
a carpet that was 5 years old and it got damaged, new-for-old cover
would provide funds to replace the carpet with a new one. However,
if you don't have new-for-old cover you would probably be given
an amount equivalent to the current value of your carpet.
As with all insurance quotations, always read exactly what is and
what is not covered by the quote. Only compare like-for-like quotations
otherwise you may come unstuck if you need to make a claim.