What is home insurance?
There are two main types of home insurance: buildings insurance and contents insurance.
What does buildings insurance cover?
Buildings insurance covers the structural and permanent features of your home, such as the roof, walls, windows, and fitted kitchens and bathrooms. It protects these elements from damage caused by events like fire, flooding, or storms.
Building insurance typically covers damage caused by fire, flood, storm, subsidence, theft, burst pipes, and falling trees.
You can also opt for additional coverage, such as accidental damage or legal expenses, depending on your needs and preferences. This ensures you have extra protection for unexpected events.
Typically, home insurance policies require that your home is not left unoccupied for longer than 30 days within a year. Additionally, these policies generally do not cover wear and tear, acts of war, or terrorism. It's important to review these exclusions to ensure you understand the limitations of your coverage.
Is buildings insurance necessary?
Buildings insurance is not legally required, but if you have a mortgage, lenders typically make it a mandatory condition. It’s important to ensure that your insurance is in place when you become the legal owner of the property, protecting it from potential risks as soon as you take ownership.
If you're a tenant, you don't need to arrange buildings insurance, as this is the responsibility of the landlord. Your focus should be on contents insurance to protect your personal belongings.
How much cover should I get on my buildings insurance?
In short, your buildings insurance policy should cover the rebuild cost of your home.
The rebuild cost differs from the sale price, as it reflects the actual cost of reconstructing the property, which is often lower than the market value.
This rebuild cost is typically listed on your mortgage valuation. It's important to get this figure right to avoid overpaying on premiums or facing a shortfall in coverage. If you live in a listed or non-standard construction building, calculating the rebuild cost may be more complex, so additional care or a specialist assessment may be needed.
What does contents insurance cover?
The contents of your home can be worth tens of thousands of pounds, often more than people realise until they consider buying contents insurance.
To value your contents, the simplest approach is to go room by room, creating an inventory of your belongings, including curtains, furniture, carpets, and clothes. Be aware that most policies have a payout limit for single items.
If you prefer to replace old items with new ones, ensure your policy includes new-for-old replacement. Indemnity policies, on the other hand, account for wear and tear, reducing the payout based on the item's current value.
Contents insurance protects against loss or damage caused by a range of events including:
- Theft
- Fire
- Storms
- Lightning
- Flooding
- Water leakage
- Explosions
- Earthquakes
Popular additions to contents insurance include accidental damage cover, which protects against unintentional harm to your belongings, and personal possessions cover, which extends protection to named items like your phone, camera, or laptop when they're taken outside the home. These extras offer added peace of mind for valuable or frequently used items.
Do tenants need contents insurance?
While contents insurance is not mandatory for tenants, it is highly recommended. By adding accidental damage cover, you can also be protected against accidental damage to the landlord's property, such as curtains or carpets, helping to avoid unexpected repair costs.
Do students need contents insurance?
Possessions kept in student accommodation are also at risk. While it may not be a top priority for students, it is advisable to consider contents insurance to ensure your belongings are protected while you’re away at university. This can offer peace of mind for items like laptops, phones, and other personal possessions.
Insuring against the risk of flooding
If your home is at risk of flooding or has flooded in the past, it is highly recommended to take out adequate insurance. During the distress of a flood, the last thing you'll want to worry about is how to pay for repairs.
If your property is at risk, you should know about Flood Re, a joint initiative between the government and the insurance industry. This scheme helps insurance providers offer more affordable policies to homes with a higher flood risk.
It’s also important to note that flood insurance included with your buildings insurance will not cover your contents, so you’ll need to insure your possessions separately.
Flood insurance covers:
- Debris removal
- Professional services, for example, solicitors or architects
- Accommodation for the period that your home is uninhabitable
- Drying out, repairing and restoring the property.
Will I be insured for subsidence?
If you've noticed large cracks in your walls, it could indicate subsidence. This issue primarily affects homes in Southern England built on clay soil. Properties vulnerable to subsidence are typically more expensive to insure. In such cases, it is recommend you work with a specialist broker who can help you find the best coverage for your situation.
Home insurance for non-standard buildings
If your home is of non-standard construction—meaning it is not built with brick walls and a tiled roof—you may require specialist insurance. Homes with alternative materials or construction methods often need tailored policies to ensure adequate coverage.
Home insurance for listed buildings
If you own a listed building, you likely understand that features such as windows, doors, or internal fittings are often not straightforward to replace
Insuring a listed building comes with specific challenges due to its historical and architectural significance. It is recommend you obtain specialist listed building insurance to ensure you are adequately covered, particularly for unique repairs and restoration requirements. This will help protect the property's original features and comply with conservation regulations.
Insuring a thatched roof home
If you live in a thatched roof home, you may find that insurance is more expensive. Thatched roofs pose a higher fire risk and require specialised maintenance, leading to higher premiums. Specialist insurance can help ensure your home is adequately protected.
This higher cost is due to the increased fire risk, as fires can spread quickly in thatched roof properties. While you can implement specific protective measures, such as chimney lining or applying fire retardant coating, itsrecommend you take out thatched roof home insurance through a specialist broker to ensure you have the right coverage for your unique property.
Insuring a holiday home
It is essential to get specialist insurance for your holiday home, as it is likely to be unoccupied for parts of the year. By taking out both buildings and contents insurance, you will be protected if your possessions are damaged while family and friends stay, ensuring full coverage for any unexpected events.