Home insurance covers your home and possessions for a range of mishaps, from those as serious as the effects of fire, flood, or subsidence to accidental damage like putting your foot through the ceiling when you're in the loft.
There are two elements to home insurance, which is also called house insurance or household insurance. These are:
- Buildings Insurance – which insures the building and any 'fixtures and fittings'; and
- Contents Insurance – which insures all of your possessions in the property.
- Buildings cover should insure the cost of rebuilding your house if it was to be totally destroyed. Clearly this amount is above and beyond what the average man in the street can afford, making buildings insurance a necessity for most of us. The rebuild cost will normally be less than the market value, so it's worth spending the time to work out the value that needs to be covered.
- The rebuild value will need to include things like the fitted kitchen and bedroom furniture, baths, toilets etc and anything else which is physically attached to the structure of the house. If you could pick the house up and turn it over, anything that didn't drop out is probably a fixture or fitting.
- Buildings insurance cover also covers 'outbuildings' like garages, sheds and the granny annex.
- Third party liability should also be included. For example if a tile blows off your roof and lands on next-door's car, you wouldn't want to foot the bill for the repairs.
- Home Contents Insurance is designed to protect your belongings from theft or damage from fire, smoke, water and the like. Anything which isn't a fixture or fitting would be covered.
- You can also choose to insure items which you take away from the property, such as cameras, MP3 players and the like.
- Some modern additions to a contents insurance policy will be items like cover for your downloaded music and movies – so make sure you keep all the receipts!
Who is it suitable for?
- Mortgage buildings insurance is usually a requirement of the lender if you have a mortgage. If you don't, it's still a good idea if you own your own home as you risk losing your home if there was a major fire or flood. If you are a tenant you probably won't need buildings insurance as the landlord will normally have it.
- Contents insurance is suitable for anyone who wants to make sure they are compensated financially for the theft or damage of their possessions. The value of your possessions can run into several thousand pounds. Just add up the cost of replacing all your electrical equipment and kitchen appliances and the numbers are already getting pretty large. Add on all your CDs, DVDs, clothes, jewellery, kids' toys, furniture etc and the premiums probably start to seem like good value.
What should you look out for?
| ||When selecting home insurance and comparing prices, you need to make sure you are comparing like with like. The main things are: |
- Risks Covered - Make sure that the policies you compare cover the same risks. A cheaper premium with less cover may well be bad value.
- Level of excess – the higher the excess is (ie the amount you need to pay towards a claim), the cheaper the premiums will be. You can opt for a higher excess to reduce premiums.
- There will be a number of extra types of cover which you can opt for. When you get an insurance quote (particularly online) the insurer or comparison site will make assumptions about whether or not to include these as default. So your cheap premium may add up if you add other covers in, or an expensive one may be more attractive if remove unwanted extras. These optional extras typically include:
- Personal Possessions Cover – this covers possessions outside your home, things like your camera, jewellery and mobile phone.
- Accidental Damage – add this to your buildings or contents cover to protect yourself from the cost of accidents around the home.
- Legal Protection – which can give you access to legal advice where this is related to your home or contents.
Read our guides to save on home insurance
There are many ways that you can get a cheaper home insurance premium, depending on your property and the contents it contains.
Before you choose a buildings or contents insurance policy, you should make sure that it meets your needs.
Unlike buildings insurance, contents insurance is not compulsory, but it’s wise to have it. Contents insurance covers items such as goods, furniture, and other valuables.
Before a mortgage is granted, your lender will require you to carry out a survey of the building to allow for accurate and adequate insurance cover. Compare the market for buildings insurance quotes.
Frequently Asked Questions (FAQs)
What do I need before I can get a quote?
- The year your home was built. If you don't know when the property was built, please check your Mortgage
Valuation or Home Buyer's Report. If you are unsure then tell us
the approximate year.
- The type of property you would like to insure, i.e. House, Bungalow, Flat, etc.
- The type of door and window locks fitted.
- What the exterior walls and roof is made of.
- Any past claims (last 5 years).
- Details of any specific 'personal possessions' you wish to cover.
- If the property is your main residence.
- If the property is self contained and has its own front door.
- Whether your home is used for business purposes.
- Whether your house is a listed building.
- If you have a garage or outbuildings.
- Whether you have had an extension.