2020 has been a year that has hit home finances hard. Workers have had hours cut, or not been able to go into the office at all. The home has become a place of solace and sanctuary, but at a cost with additional heating, lighting and power required as people work from home. Holidays have been lost and household budgets bore the brunt of a truly horrible year.

The Guardian suggests that household finances took the biggest hit since the 1970s and, with no clear end in sight right now, people are having to look at budgets and make tough decisions. Any outgoings are being scrutinised, and cuts being made where possible. One area that is likely to be closely examined is insurance, with a multitude of cover and policies potentially falling victim to household cuts.

Which insurances are important, and why should you keep them in place? We have put together a guide of which household insurances are vital over the coming 12 months.

Life Cover

We have already looked at whether you should cut back on life insurance in the modern world, with our article Is Life Insurance More Important in This Modern Day? – arriving at the conclusion that it is perhaps even more important than ever. There may be savings in switching your policy, or examining the finer details and seeing if you can downgrade, but protecting your loved ones in the event of a disaster is as important as it ever was.

Utilities

You may consider insurance for specific utilities within your home as an expendable cost but do so at your own risk. Policies that cover certain aspects of your home are not uncommon. For example, the drainage and plumbing insurance featured on HomeServe protects you against your system breaking down and ensures any disruption and costly repairs are covered. It is especially pertinent for older systems, or post-renovation when you have made changes to the installation. Inevitably, there will be times when particular drainage repairs are required around a home, such as a new drainage Connection from Express Drainage Solutions, for instance, and so preparing for contingencies is a must.

As well as plumbing, you can take policies out for your heating system, your boiler, even your electrics. You can get certain perks too, such as a boiler service included, which helps prevent a problem as well as protect you in the event of one arising. These policies are relatively low cost, but the items they cover within the home are usually expensive to replace. However, if you live in rented accommodation, this type of cover is usually the responsibility of your landlord.

Contents

Contents insurance is usually one of the first to go when scaling back, with ABI reporting that one in four UK homes do not have any cover at all. The cost of contents insurance fell to a record low last year, which again means a low-cost option for protecting your family. Even if you are working from home and therefore at far less risk of burglary, there are still dangers such as accidental damage to consider. It might be worth examining the policy you have when it is up for renewal, and maybe shopping around. Also, remember any single items you have worth insuring should be declared on the policy.

Remember, most policies cover items such as mobile phones and laptops from accidental damage too, meaning low-cost replacements for items likely to be seeing more usage during restrictions.

Buildings

A good building policy covers not only the fabric of your home but can also stretch to individual areas such as the kitchen and bathroom. If you have an outstanding mortgage on your property, then you should be bound by the mortgage provider to have buildings cover. If you rent your property, this is not your responsibility, but that of the landlord. If you own your property and have paid off your mortgage, then the choice is up to you, but a serious incident could leave you penniless and homeless, so choose wisely.