Understanding Home Insurance: Buildings and Contents
Home insurance comes in two main types: buildings insurance and contents insurance. Buildings insurance covers the structure of your property including walls, roof, floors, fitted kitchens, and bathrooms against damage from events like fire, flooding, subsidence, and storms. Contents insurance protects your personal belongings including furniture, electronics, clothing, and valuables against theft, damage, and accidental loss. Most homeowners need both types of cover, and many providers offer combined home insurance policies that bundle buildings and contents together at a competitive price. If you are a tenant, you typically only need contents insurance as buildings cover is your landlord's responsibility.
What Does Home Insurance Cover?
A standard home insurance policy covers damage from a range of events including fire, theft, flooding, storm damage, subsidence, escape of water from pipes or tanks, and impact damage from vehicles or falling trees. Contents policies typically also cover accidental damage to your belongings, though you may need to add this as an optional extra for buildings cover. Many policies include additional benefits such as alternative accommodation costs if your home becomes uninhabitable, legal expenses cover, and public liability protection. However, home insurance usually does not cover gradual deterioration, wear and tear, or damage caused by poor maintenance, so keeping your property in good repair remains important.
How Much Home Insurance Cover Do You Need?
Getting the right amount of cover is crucial. For buildings insurance, you need to insure for the rebuild cost of your property, not its market value. The rebuild cost is typically lower than the sale price as it does not include the land value. Your mortgage provider or surveyor can help determine the correct rebuild figure. For contents insurance, you should calculate the total value of all your belongings as if you had to replace everything from scratch. Many people underestimate this figure, which can leave them underinsured and unable to claim the full replacement cost after a major loss. Taking a room-by-room inventory helps ensure you have an accurate total.
Factors That Affect Your Home Insurance Premium
Several factors influence how much you pay for home insurance. Your property's location is significant, as areas prone to flooding, subsidence, or higher crime rates attract higher premiums. The type and age of your property, its construction materials, and the security measures in place all play a role. Your claims history, the level of cover you choose, and the excess amount you are willing to pay also affect the price. Installing approved locks, burglar alarms, and smoke detectors can reduce your premium, as can joining a neighbourhood watch scheme. Paying annually rather than monthly and building up a claims-free history are additional ways to keep costs down.
Tips for Finding the Best Home Insurance Deal
Finding the best home insurance deal requires comparing policies on more than just price. Check the policy limits for individual high-value items, as many policies cap single-item claims at 1,000 to 2,000 pounds unless you declare them specifically. Look at the excess amounts for different types of claim, as some events like subsidence or flooding may carry higher excesses. Read reviews of insurers' claims handling, as a cheap policy that pays out reluctantly offers poor value. Consider whether you need additional options like accidental damage cover, home emergency cover, or personal possessions cover away from home. Comparing quotes from multiple providers at renewal time rather than auto-renewing is one of the most effective ways to secure a competitive deal.