A number of top notch banks in the UK including Coutts, United Kingdom’s biggest lender and the eighth largest property purchaser in the U.K., have come up with a novel scheme to encourage property owners to insure their homes against disasters. What is it and how does it work? It’s called Nedbank Buildings Insurance and is aimed at “creating an innovative environment where owners can pool risks from multiple insurance providers”. That is, they are encouraged to pool risks between themselves in order to secure multiple policies from the same company. The result being that those who have multiple insurances from the same provider (even within the same company) will receive lower rates on their homeowner insurance.
In layman’s terms, a property owner insures his building against damage or destruction by fire, flooding, subsidence, storm, earthquake or explosion, which may not occur. A part of the property, says the attic, is also insured for the same reason – that is, if the house was damaged by fire or flood, the insured property will be rebuilt and the cost thereof reimbursed to the owner. The property owner then has the option of renewing the insurance policy or moving to another one of the various schemes of which Nedbank Buildings Insurance is a member.
If you are thinking about taking out any sort of building or property insurance policy, you should bear in mind that there is no legal obligation to do so. It is entirely your choice as an individual to opt for any such policy or not. The main consideration however is to choose the best deal that encompasses all your insurance needs in the widest sense possible. By pooling your risks amongst several insurance providers you can make it easier to get a good price. Another important consideration is that you may be eligible for discounts, which will take some of the edge off the premiums but are unlikely to completely offset it.
Here is how it works. When you take out any sort of insurance policy covering your home, you are usually making a co-guaranty either on your property or that of the third party (someone you want to insure against). This means that the insurance company will be backing you up if anything were to happen. The other party (the third party) pays into an account via a bank or their chosen provider and this is where the money that is paid out will be divided between the insurer and the person that they have insured.
The benefits of taking out building insurance include the fact that it covers your home as well as the contents in it, which in many cases can increase the value of your home and make it considerably safer from fire damage than it would be without cover. If you are a landlord then you can often get a discount through the policy, because your building is also covered by the insurance. The insurer may also offer you a level of guarantee against damage caused by vandalism or smoke damage, although this is rarely the case. A great number of people take out insurance quotes online, and for good reasons, as you are able to find competitive quotes from the comfort of your own home.
It is often more economical to buy building and contents insurance together as the cost of both types of insurance tends to be lower than they are to take out them separately. You should always check with your provider what the building insurance quote includes within its policy, as this could be substantial and you may find that you need to increase this in some cases. A large number of people prefer to take out a range of insurance policies from one provider, ensuring that they have protection for a variety of different scenarios, which makes shopping around for your home insurance much easier.