Its important for a council house tenant to understand what type of home insurance the need to give them piece of mind.
There are two main types of insurance: Building and Contents Insurance
Items in your house such as electric goods, jewelry, furniture, and appliances need to be covered by home contents insurance. If these items were stolen or damaged they would be covered under a home contents policy. The insurance company would then have to pay out a sum towards replacements.
Home contents Insurance is available in two options. ‘New for Old’ and ‘indemnity’ cover. The most comprehensive version is the new for old policy. The insurance company will payout for a claim to replace the items new value. For example, if a 15 year old carpet got ruined by a flood. A payout would be awarded to cover the replacement of new carpet of similar quality. Even though the original carpet was well worn and past its best.
The indemnity cover is less expensive. This cover only reflects the items value at the time of a claim. For example, the insurance cover would only payout the value of your 15 year old carpet, not a brand new replacement. The value of a carpet which is many years old is likely to be much less than a new replacement.
To cover the fabric of the house buildings insurance cover is needed. A council or housing associations tenant need not worry about this. The landlord will automatically have a buildings policy to protect their own interests. If the tenants home was damaged the council would arrange timely repairs at no cost to the occupier. If the unlikely event the tenant was deemed to be negligent and caused the damage. The council then might pursue the tenant for the cost of repairs.
For a typical council tenant our advice would be to treat the property as they would their own house. Get “new for old” contents cover and they will then have piece of mind that in the event of an accident or incident. Items will then always be covered properly by a sound insurance policy.
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