Home insurance guide
Fully comprehensive home insurance is not compulsory and some people choose not to have as much cover as they need.
But think what would happen if your roof caved in, burglars stole your jewellery or your possessions were destroyed in a fire.
How would you cope with having to rebuild and replace with no compensation?
A guide to home insurance
Home Insurance (also known as house insurance, household insurance, buildings insurance, contents insurance and so on) can protect your home and its contents.
But there are many options available to you, and with so many suppliers around you’ve got to be sure that you’re buying the right policy. For example, someone who lives in an area prone to flooding will have different needs to someone who rents a flat on the 10th floor of a tower block.
So what are the different types of home insurance?
Mortgage providers will insist that you have buildings insurance to cover the structure of your property. It’s vital security, ensuring that you have the cash to repair or rebuild your home in case something disastrous happens.
However, there are instances where you don’t need it. If you’re a tenant, your landlord should sort it while leaseholders will often find that their freeholder will have a policy in place – always check though.
Buildings insurance doesn’t just cover the structure – it should also include permanent fixtures and fittings in your home. Think toilets, fitted kitchens, baths and so on.
Some things to check:
- The amount covered should be the rebuild cost not the market value. Don’t second guess the rebuild cost – you could ask a surveyor for help – because you don’t want to be short-changed in the event of a claim.
- What cover is provided for damage caused by such things as storms and floods, burst pipes, subsidence, other people and fire? In other words, what are the exclusions?
- If you can’t live in your damaged home, does the insurance cover alternative accommodation?
- Does the policy cover other buildings such as garages and greenhouses, swimming pools and boundary walls? Some of these may not be covered and will require additional cover.
- Is your property built from non-standard materials, eg prefabs? Some insurers may not cover you if it is.
Buildings insurance doesn’t generally cover the things you move from one property to the next. That’s the job of home
. Clothes, microwaves, freezer contents, books, CDs, furniture and much more could be included.
When getting a contents insurance quote, check what you get as a replacement if you need to claim. Basic contents cover may only replace like-for-like – the replacement will be the same age as the item lost or damaged. Other policies will replace your old items with brand new ones but this will probably mean higher premiums.
Don’t under-insure. You’ll need to specify the value of goods in your home and it's not unusual for people to wildly underestimate the value of things they own. Just think about the number of DVDs and CDs you have at £10 a go… The only real way to get to the bottom of this is to make a list and include everything from the family heirlooms down.
Other things to check when getting a contents insurance quote:
- You may need additional cover if your belongings are particularly valuable, such as jewellery or art. This is because standard home contents insurance can limit payouts to a certain amount per item or a maximum total
- Does the policy cover garden contents (including plants)? Some now include this is as standard
- How far does accidental damage cover go? There may be limits on what’s covered and what’s not
- Personal possessions. You can get cover for these for when you’re away from home but it will cost you extra
- Is there additional cover for wedding and Christmas presents?
- Are you covered if your possessions are damaged by furniture removers?
Extras are often available to customise your home contents insurance for additional fees. For example, you may want to increase the accidental damage element of your policy and add sports cover or legal assistance to pay for court costs.
Buildings and contents insurance
You don’t have to get these separately. Most insurers offer combined
buildings and contents insurance
and some will give you a discount if you buy together.
You also don’t have to take out insurance with the same company that offers you a mortgage (unless it’s part of the mortgage terms and conditions). As with anything to do with house insurance, make sure you check the paperwork carefully to see that you have the cover you need.
It’s not all about standard buildings and contents insurance. Some of us have specialist needs:
Landlords – If you rent out a property, you should consider specific home/house insurance. It usually goes by such names as landlord's insurance, buy to let home insurance or residential property insurance. It can include cover for such things as loss of rent, legal support and property owner’s liability.
Student possessions. A sort of cut-down version of home contents insurance that can also cover things like library books and your liability as a tenant. Some students may find their possessions already covered under a parent’s house insurance policy so check this carefully before buying.
High value home insurance. Standard house insurance policies will have maximum contents and buildings cover limits that may not be suitable if you’re lucky enough to own a large property and expensive possessions. So a high value home insurance policy can be the answer. It can even extend cover to a second home and provide other benefits over and above a standard policy.
And more… If you own a listed building – and there are tens of thousands of them in the UK – you may need specialist building insurance because putting things right in case of disaster will cost you a lot more.
Building your own home? Again, specialist house insurance is needed to cater for such things as injuries to people working on it or to cover legal disputes that may arise.
Floods, subsidence and more
Flooding. Major floods in recent years have increased the focus on this aspect of home insurance cover and premiums have increased for many in areas most affected. It’s important that you have the right level of cover if you live in a flood-risk area - visit the
for more info and for what you can do to protect yourself. If you’ve been affected by a flood, visit our
flood and storm damage
Subsidence. If you live in an area prone to subsidence you may find it hard to get insurance – but if you do, you’ll probably have to pay extra. Get help from a broker if necessary. If you’re buying a home, make sure you check out its subsidence risk before agreeing a deal so you know what you’re getting yourself into.
Cutting home insurance quotes, premiums and risk
Taking some simple steps can help cut your home insurance quote and premium - and reduce your chances of having to claim. These include:
- Making sure your home is as secure as possible. Window locks, a burglar alarm, top quality door locks and so on can all help cut your premium. Don’t say you have these when you don’t because if you make a claim and they’re not there, you may invalidate the claim.
- You can make your premium cheaper by changing your excess levels. This means you will be required to pay more upfront if you make a claim
- Fit smoke alarms
- Check that your potential insurer has a no claims discount
- Live in a Neighbourhood Watch area
And two final things...
Always check the paperwork. It may not be up there with a good novel but it’s the only sure way of checking what your policy includes and excludes.
Keep receipts and other evidence of your belongings, eg photos. These are invaluable when making a claim.