Home insurance can protect your property and belongings if something goes wrong. There are two main types: buildings insurance and contents insurance.
You may need one or both, depending on your home and whether you own or rent it.
Buildings or Contents?
Buildings and contents insurance protect different things.
Buildings insurance covers the structure of your home and usually its permanent fixtures and fittings.
Contents insurance covers many of the belongings you would normally take with you if you moved.
For example, a fitted kitchen would normally fall under buildings insurance, while your television would normally be part of your contents cover.
The exact cover depends on the policy, so always check the terms.
Buildings Insurance
Buildings insurance is mainly for homeowners.
It can cover the cost of repairing or rebuilding your home following events included in the policy. These commonly include risks such as fire, storm, flood and escape of water.
Cover can also extend to permanent parts of the property, such as:
- walls and roofs
- fitted kitchens
- fitted bathrooms
- pipes and drains
- garages and other permanent structures
However, policies differ. Check what is included rather than assuming every part of your property is covered.
Do You Need Buildings Insurance?
Buildings insurance is not generally required by law. However, if you have a mortgage, your lender will normally require the property to have suitable buildings insurance.
You do not usually have to buy that insurance from your mortgage lender.
If you own your home without a mortgage, the decision is yours. However, consider whether you could afford major repairs or rebuilding costs without insurance.
What About Leasehold Homes?
If you own a leasehold flat, the freeholder or managing agent may already arrange buildings insurance for the whole building.
The cost may then form part of your service charge.
Check your lease and existing arrangements before buying separate buildings insurance. You may still need your own contents cover.
Contents Insurance
Contents insurance protects belongings inside your home against risks covered by the policy.
This can include things such as:
- furniture
- televisions and computers
- clothes
- kitchen equipment
- books
- personal possessions
Imagine turning your home upside down. Many of the things that would fall out are likely to be contents rather than part of the building.
That is only a simple guide, though. Your policy wording determines what is actually covered.
Do Renters Need Insurance?
If you rent your home, your landlord will normally be responsible for insuring the building.
However, the landlord’s buildings insurance does not normally cover your personal belongings.
Contents insurance can protect the things you own, such as your furniture, clothes and electronics.
Before buying cover, check your tenancy agreement and understand what belongs to you and what belongs to your landlord.
How Much Buildings Cover?
Buildings insurance should reflect the cost of rebuilding your home rather than simply its market value.
These are not the same thing.
A house might sell for £300,000, for example, but that does not mean it would cost £300,000 to rebuild. The market price includes factors such as the location and value of the land.
Some policies provide a high or unlimited level of buildings cover, while others require a rebuilding figure.
If you need to provide one, make sure it is realistic.
How Much Contents Cover?
Think about how much it would cost to replace the belongings in your home.
It is easy to underestimate this amount because individual possessions may not seem particularly expensive. Added together, however, furniture, clothes, electronics, appliances and other belongings can be worth a substantial amount.
Go through your home room by room and make a simple inventory.
Also check whether valuable individual items need to be listed separately.
High-Value Items
Policies often have limits on how much they will pay for a single item or particular types of belongings.
This can matter if you own expensive jewellery, watches, artwork, bicycles, computers or other valuable possessions.
You may need to tell the insurer about items above a certain value.
Do not assume that a high overall contents limit means every individual possession is fully covered.
Cover Away From Home
Standard contents insurance may mainly protect belongings while they are at home.
If you want items such as a phone, laptop, watch or jewellery covered when you take them outside, you may need personal possessions cover.
Some policies include this automatically, while others offer it as an extra.
Check where the cover applies, which items are included and whether individual limits apply.
Accidental Damage
Standard home insurance does not necessarily cover every accident.
You may be able to add accidental damage cover for events such as damaging furniture or accidentally breaking a fitting.
Before paying for it, check what the standard policy already includes and what the additional cover actually adds.
Also look at the excess because smaller claims may not be worthwhile.
What Is the Excess?
The excess is the amount you may have to pay towards a claim.
For example, if you make a successful claim for £1,000 and a £250 excess applies, the insurer may pay £750.
Some policies have different excesses for different types of claim.
You may also be able to choose a voluntary excess. A higher excess can sometimes reduce the premium, but it also means paying more yourself if you claim.
Choose an amount you could realistically afford.
What Might Not Be Covered?
Home insurance does not cover everything that can happen to a property.
Policies contain exclusions, conditions and limits.
For example, problems caused by gradual wear and tear or poor maintenance are commonly different from sudden insured events.
Cover may also be affected if a property is left empty for an extended period.
So, read the policy rather than assuming that any damage to your home will result in a successful claim.
Escape of Water
Water damage is one of the problems home insurance may cover, but the cause matters.
A policy might cover damage caused by water escaping suddenly from a pipe. However, it may not pay to repair a problem that resulted from gradual deterioration or poor maintenance.
There can also be separate excesses for water-related claims.
If you discover a leak, act quickly to limit further damage and contact your insurer where appropriate.
Flooding
Buildings and contents policies can provide protection against flooding, but check the details carefully if your home is in an area with a higher flood risk.
The excess, price and availability of cover can vary.
Do not confuse flooding from outside the property with water escaping from a pipe inside the home. Insurance policies may treat them differently.
Home Security
Insurers may ask about locks, alarms and other security measures when you apply.
Answer accurately.
If your policy requires particular security measures, make sure you understand them. For example, conditions may apply when the property is empty or when nobody is staying there overnight.
Giving inaccurate information could cause problems later.
Working From Home
If you work from home, tell the insurer when required.
Ordinary home insurance may cover some office equipment, but business equipment, stock, customers visiting your home or other business activities can require different cover.
The important point is to make sure your insurer understands how the property is being used.
Compare More Than Price
The cheapest home insurance policy is not necessarily the best value.
When comparing policies, look at:
- buildings and contents limits
- excesses
- individual item limits
- accidental damage
- personal possessions cover
- exclusions
- optional extras
- how you would make a claim
A policy is useful only if it provides the cover you actually need.
Paying Monthly
Paying monthly can make the cost easier to manage, but it may cost more overall than paying for the year in one payment.
Check the total annual amount rather than comparing only the monthly figure.
If monthly payments include interest or another charge, make sure you understand the extra cost.
At Renewal
Do not automatically renew without checking the policy.
Your circumstances may have changed during the year. You may have bought valuable items, moved, changed how you use your home or altered the property.
First, check that your existing cover is still suitable. Then compare the renewal price and policy terms with alternatives.
Price matters, but so does maintaining the right cover.
Making a Claim
If something happens, contact your insurer as soon as reasonably possible.
Take reasonable steps to prevent further loss or damage where it is safe to do so. Keep photographs, receipts and other evidence that may support the claim.
Do not dispose of damaged items or arrange major repairs before checking what your insurer requires, unless urgent action is needed to make the property safe or prevent further damage.
Before You Buy
Decide whether you need buildings insurance, contents insurance or both.
Then work out the level of cover you need and check any valuable items separately.
Finally, compare the policy itself rather than focusing only on the premium. Look closely at excesses, limits, exclusions and optional extras.
The aim is not simply to find cheap insurance. It is to have suitable protection if you actually need to claim.
Key Points
- Buildings insurance protects the structure; contents insurance protects your belongings.
- Mortgage lenders normally require suitable buildings insurance.
- Renters usually need to arrange their own contents cover if they want their belongings protected.
- Check excesses, exclusions and individual item limits.
- Make sure the insurer has accurate information about your home.
- Compare the cover as well as the price.
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