Home insurance for beginners

The Times has a great beginner's guide to home insurance. There are two main types of home insurance; building and contents.

For those of you too lazy to read the article here are some brief highlights:

Building insurance

• Most lenders insist that you have this before offering a home loan.
• Protects the bricks and mortar of your property plus permanent fixtures like fitted kitchens and bathrooms.
• Also covers garages, greenhouses and sheds, but not usually boundary walls, fences and driveways.
• Protects a home from fire and damage by third parties.
• Not all policies cover storm and flood damage, burst pipes, water leakage and subsidence.
  Based on cost of rebuilding a property rather than its market value.
• Most policies will provide you with alternative accommodation should your home become uninhabitable.
  

Contents insurance

• Not compulsory, but advisable.
• Protects your possessions - anything from electronic goods, furniture and jewellery, to sports equipment and the food in your freezer. Increasingly, garden plants and tools are insurable too.
• Covers fire and third party damage, as well as theft, but may not pay out for damage caused by storms, flooding, frozen pipes and other leakages.
• Some policies cover legal costs should you or someone else sustain injury in your home or if you have a dispute with your neighbour.

Struggling Direct Line and Churchill insurance owners look for rescue package

The insurance arm of Royal Bank of Scotland (RBS), the struggling parent company of top UK insurance brands Direct Line and Churchill, is subject to an advanced bid valued in excess of £3 billion. If successful private-equity group CVC and Swiss Re, the world’s largest reinsurance group would take a 51% stake in the business, according to The Times.

This could affect as much as half the population as, with 26 million policies, RBS Insurance is the second-largest general insurer in Britain, the largest motor insurer and the second-largest home, travel and pet insurer.

Like most other banks RBS has been hit hard by the credit crunch, and recently lost chief executive Fred Goodwin who resigned after the bank was forced to sign up to a rescue deal likely to make the British government its controlling shareholder in the short term.