Your home is likely to be your biggest ever purchase, so it’s well worth protecting with insurance. There are a number of factors that will affect the size of your home insurance premium, including location, the home’s age and building material, the rebuilding value and the size of the excess you choose. Your lender will require you to take out and show proof of home building insurance to cover the estimated amount they are lending you towards the building component of the property. However, this amount may leave you underinsured and, if the worst happens and you lose your home to a fire or severe weather, out of pocket.
Most insurers offer home building calculators online so you can estimate your sum insured to replace your entire home. Make sure you also factor in fences, swimming pools and any expensive building materials or fittings. Although not required by lenders, you should also take out contents insurance for your household items.