Read the insurance policy small print

Just because you have buildings and contents insurance, it does not necessarily mean you will receive a pay out when you make a claim. Most home insurance policies have conditions in the small print that enable insurance providers avoid paying claims altogether or keep pay-outs to a minimum. The Financial Ombudsman receives more complaints about insurance than any other financial matter.

So what specifically should you look out for?

Insured events

Taking reasonable steps

Full disclosure

Limits on new for old policies

When you claim may be rejected

Insured events

In general, household cover only pays out for specific events such as a fire, storm, flood, explosion, subsidence, impact or a burglary. You can get cover for accidental damage with both buildings and contents insurance at an extra cost. Any claim caused or attributed to poor maintenance will be rejected, such as any damage caused by a leaking roof.

Taking reasonable steps

Damage caused by burst pipes is covered Most small print on policies state that you must "take reasonable steps to prevent loss, damage or accident". A burglary claim must be as a result of "violent or forced entry". If you leave a window open or a door unlocked, you could find you claim is not paid or not paid in full. Similarly, if you receive a discount on your premium because you have window locks and a burglar alarm, if they are not used when the home is unoccupied you will not be fully covered. Pay special attention to items in your garden shed.

Full disclosure

You must be honest about anything that will affect your level of risk. Tell the insurer about things like previous claims, if you have been refused insurance and any criminal convictions. You must also tell your insurer if your circumstances change such as taking in a lodger, working from home or if the home will be unoccupied for long periods or you intend going on an extended holiday.

Give thought to policy limits and new for old

Watch out for limits such as the amount of cash covered and single article limits on valuables. If you have a £2000 watch this will need extra cover. Some insurance policies are "new for old", whilst others will only give second hand rates or market value for contents items that may be less than you paid.

Take steps to ensure you claim is not rejected. Most policies will require a mark down for wear and tear for linen, towels and clothes. You may also find that insurer will only pay for damaged items and you may end up with chairs that do not match for example.

When you are likely to have a claim rejected:

For items worth more than £500 stolen from your garden or more than £2000 from your shed or garage.
Any damage caused by pets.
Damage caused by vermin such as rodents.
Valuable items worth more than £1,500 not separately specified.
Damage or loss to TV aerial or satellite dish
Domestic flooding caused by leaving a tap on.
When there is no forced entry especially if you have or had a lodger and not informed your insurer.
Damage or loss to anything belonging to someone who does not live in the home.
When alarms are not set and windows or doors left open or unlocked.
Accidental damage to business laptops, mobile phones cameras etc.
Loss, damage or liability arising from defective construction caused by poor or faulty design, workmanship or materials. This is particularly relevant for owners of new homes.

Your claim may be only partially paid if:

You are unable to produce receipts or valuations for items lost or damaged.
You are under-insured. If the replacement value of your contents exceed the sum insured, usually only a proportion of your claim will be paid.

It is a good idea to keep receipts and make a note of serial numbers. Making a thorough inventory is a good idea. Also take photographs for each room and for any specified valuable possessions to avoid any problems should you need to make a claim.

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