Basic homeowners insurance policies can be quite difficult to understand. The terminology used can be quite dated with plenty of insurance speak and jargon.

Here I will attempt to break down some of the terms and meanings contained within a typical basic homeowners insurance policy.

Usually a basic homeowners policy will start with an index and policy guide detailed the various sections of the policy. This gives the policyholder the ability to quickly identify which section and page number they should go to if they need to check a certain section of cover relating to a particular claim they may wish to make, without having to trawl through everything other section of their insurance policy.

After the index you will normally find a section which sets out the basis of the contract under the basic homeowners insurance policy between the policyholder and the insurer. Typically in this section of your basic homeowners policy it will outline the package contents that you have received, the law governing the contract and a request that you notify the insurer should any material facts or changes that could alter the insurance you have taken out.

A material fact is something you change or do to your home which could in turn make the insurance invalid, or change the premium (the amount you pay for the insurance) of your basic homeowners insurance policy.  For example the premium could increase if you extended your home or alternatively if you installed better locks and an alarm to the building, this in turn could reduce the cost of the premium.  Whether or not the premium would go up or down, both of these examples are material facts which would affect your basic homeowners insurance and as a result the underwriters need to be informed.

Whilst the insurers will not want you to notify them of every time you change your curtains or paint your walls, it is best to err on the side of caution and if in doubt let them know.

Here are some things that would affect your basic homeowners insurance policy which you should let the insurers know.

• If anything is done to your home which may affect the full rebuilding costs. Examples would be, extending the building, adding central heating or double glazing.
• Someone other than a family member is going to live in your home.
• Any part of your home is going to be used in connection with a trade or business purposes.
• The type of job you or your partner is going to change.
• You are going to move house permanently.
• Your home is going to be unoccupied for more than sixty days in a row.
• Non routine work is going to be carried out to your home.
• The number of bedrooms in your home is going to change.
• You or any member of you family has any convictions or prosecutions pending.

The above list is far from exhaustive and highlights just a few of the general material facts that would have an effect on the terms and conditions of your basic homeowners insurance.  You will need to read carefully the terms of each individual policy and check if there are nay specific material facts an individual insurer would request notification of.

An important point to note is to notify your insurers immediately these changes occur. You will not have an argument just because a certain change was not in existence when you first took the insurance out.

Equally important is to notify your basic homeowners insurance company in writing and keep a copy of the notification, just in case this is disputed later down the line in the unfortunate event of having to make a claim.