Protecting Your Home and Belongings
Home insurance can help with the cost of repairing your home or replacing your belongings when something goes wrong.
There are two main types:
Buildings insurance protects the property itself.
Contents insurance protects the belongings inside it.
You can buy them separately or together. The cover, limits and exclusions vary between policies, so it is important to compare more than the price.
Buildings Insurance
Buildings insurance covers the structure of your home and permanent fixtures and fittings.
This can include:
- Roof, walls and floors
- Windows and doors
- Fitted kitchens
- Bathrooms
- Other permanent fixtures
Depending on the policy, cover may also extend to garages, sheds and other structures.
Policies commonly provide cover for events such as fire, flooding, storms, subsidence and escape of water, but the precise cover varies.
Contents Insurance
Contents insurance protects the belongings in your home.
Think about the things you would normally take with you if you moved, such as:
- Furniture
- Televisions and computers
- Kitchen appliances
- Clothing
- Curtains and bedding
- Jewellery and other personal possessions
Policies usually have limits, including limits for individual high-value items. Valuable possessions may need to be listed separately.
Do You Need Both?
That depends on your circumstances.
If you own your home with a mortgage, your lender will normally require suitable buildings insurance. Contents insurance is generally optional.
If you rent, the landlord is normally responsible for insuring the building, while you decide whether to insure your own belongings.
Arrangements can be different for flats and other properties where buildings insurance is arranged collectively, so check what cover is already in place.
Rebuild Cost Is Not Market Value
This is an important distinction.
Buildings insurance is normally based on the cost of rebuilding your home, not what you paid for it or what you could sell it for.
The rebuild figure needs to account for the cost of reconstructing the property and associated costs.
For a standard property, you can use an appropriate rebuilding-cost calculator. Unusual, listed or non-standard properties may require professional advice from a chartered surveyor.
Make Sure You Have Enough Cover
Do not deliberately underestimate the value of your home or belongings simply to reduce the premium.
If you are underinsured, you could have problems when making a claim.
For contents insurance, think about how much it would cost to replace all your possessions rather than just the most expensive items.
Review your cover periodically, particularly after renovations or significant purchases.
What Is an Excess?
The excess is the amount you contribute towards a claim.
For example, if you make a valid claim for £1,000 and a £200 excess applies, you would normally contribute the first £200.
Policies can have different excesses for different types of claim.
Choosing a higher voluntary excess may reduce the premium, but make sure it is an amount you could comfortably afford if you needed to claim.
Accidental Damage
Do not assume accidental damage is automatically included.
Some policies provide limited accidental damage as standard, while broader accidental-damage protection may be an optional extra.
Examples might include accidentally damaging a television or drilling through a pipe, depending on the cover purchased.
Check the policy rather than relying on the name of the product.
Belongings Away From Home
Standard contents insurance does not necessarily protect everything when you take it outside your home.
You may be able to add personal-possession or similar cover for belongings such as:
- Phones
- Laptops
- Jewellery
- Bicycles
Check where the cover applies, the individual item limits and whether valuable items need to be specified separately.
What Might Not Be Covered?
Home insurance does not cover everything.
Common restrictions or exclusions can include:
- Normal wear and tear
- Poor maintenance
- Damage that happens gradually
- Some losses while a property is left unoccupied
- Losses above policy limits
The details vary considerably between policies.
Always read the exclusions and conditions before buying.
What Affects the Price?
Insurers consider a range of factors when calculating the premium.
These can include:
- Where you live
- Type and construction of the property
- Rebuilding cost
- Value of your belongings
- Flood or subsidence risk
- Previous claims
- Security
- Level of cover
- Excess
- Optional extras
Two policies with similar prices can therefore provide very different levels of protection.
Compare the Cover, Not Just the Premium
A cheaper policy is not necessarily better value.
When comparing home insurance, look at:
Buildings cover
Is the rebuilding amount sufficient?
Contents cover
Would it adequately replace your belongings?
Single-item limits
Are expensive possessions adequately covered?
Excesses
How much would you have to contribute to a claim?
Accidental damage
Is it included or optional?
Cover away from home
Are possessions protected outside the property?
Alternative accommodation
What happens if your home becomes temporarily uninhabitable?
Exclusions
What circumstances are not covered?
This makes comparison much more meaningful than simply choosing the lowest premium.
Tell the Insurer About Changes
The information you give your insurer matters.
Answer questions accurately when applying and tell the insurer about relevant changes when required.
For example, significant renovations or an extension can change the rebuilding cost and the cover you need.
If You Need to Make a Claim
Contact your insurer as soon as reasonably possible and follow the claims procedure in your policy.
Keep useful evidence where appropriate, such as:
- Photographs
- Receipts
- Details of damaged or stolen items
- Relevant correspondence
Depending on the circumstances and policy, an insurer might arrange repairs, replace an item or make a cash settlement.
If you are unhappy with how a claim or complaint has been handled, complain to the insurer first. If the matter remains unresolved, the Financial Ombudsman Service may be able to consider the complaint.
Home Insurance Checklist
Before buying or renewing, ask:
What do I need to insure?
Buildings, contents or both?
Do I have enough cover?
Check the rebuilding cost and the value of your belongings.
What are the limits?
Look particularly at valuable individual items.
What excess would I pay?
Check compulsory and voluntary excesses.
What isn’t covered?
Read the exclusions and conditions.
Do I need any extras?
Consider accidental damage, possessions away from home or other optional cover based on your circumstances.
Am I comparing like with like?
Do not compare premiums without comparing the protection behind them.
Compare Home Insurance
Home insurance policies can look similar while providing quite different levels of cover.
The aim should not simply be to find the cheapest premium.
Look for the cover you actually need at a price you can afford.
Energility’s insurance comparison service is coming soon.
Until then, our guides will help you understand the products and features you are comparing.
The Bottom Line
Home insurance is easier to understand when you separate it into two questions:
What would it cost to repair or rebuild my home?
and
What would it cost to replace my belongings?
Then look carefully at the limits, excesses, exclusions and optional extras.
The right policy is not necessarily the one with the longest list of features or the lowest price.
It is the one that provides appropriate cover for your circumstances at a cost you can afford.
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