Types of Home Insurance
There are 2 different types of home insurance. The names give it away a bit, but here's an explanation:
Buildings Insurance
This covers the actual structure of your building and is often taken out alongside your mortgage. Your mortgage lender will probably insist you have it, for their financial security as well as yours.
As well as covering damage to the actual bricks and mortar, buildings insurance usually covers permanent fixtures and fittings too - like doors, windows, skirting boards and bathroom fittings.
If your whole house burnt down, you could be pretty helpless without buildings insurance as you'd have to cover the costs out of your own pocket. Even a small fire or flood could result in significant repair and clean-up costs.
Contents Insurance
This covers the possessions inside your home. Typically, anything you would take with you if you were to move house
is classed as 'contents'. This is different from buildings insurance which covers the actual structure of your property.
Should any of your possessions become damaged or stolen,
a contents insurance policy could help you cover costs.
From curtains to antiques, it can help financially protect all
the items in your home.
It's important to accurately insure the collective value of all
your contents. If you over-insure your items, you could be paying for unnecessary cover. Equally, if you under-insure
all your belongings you could be out of pocket should you
need to claim.
Why you need it
Your home is probably your most treasured possession. In fact, it's likely to be the most expensive item you'll ever purchase in your life.
That's why home insurance is so important - it's there to protect it.
From fire to flooding, the right home insurance cover can help you cover costs if your property is damaged or your possessions broken or stolen.
If you love your home, it's time to give it the protection it deserves with the right house insurance.
Policies vary between providers, but most home insurance offers should cover you for the nasties mentioned below:
- Fire
- Storms and flooding
- Falling trees
- Lightning strikes
- Explosions and earthquakes
- Subsidence, heave and landslip
- Aircraft or falling objects from an aircraft
- Theft
- Riot or malicious activity
- Water and oil leaks
- Damage to the property made by vehicles or animals
- Broken or collapsed aerials
How much cover do I need?
Before you start searching for buildings insurance, it's important you find out your property's rebuild
cost. This will determine how much cover you need.
When purchasing contents insurance, don't get caught out and under-insure or over-insure your
possessions. Try to make sure you give an accurate sum insured, which will be based on the collective
value of all your belongings.
Also, be aware that some high value items may require additional cover. If you have an expensive item
that you want to be covered, check with your chosen provider to make sure it's fully insured. When you
get a home insurance quote with us, we'll give you the option to add specific valuable items to be included
in your cover. When you compare house insurance quotes and buy with us you are in control of the level of
cover you buy.
What's the rebuild cost?
Basically, it's how much it would cost to completely rebuild your home from scratch.
Don't confuse this with the market value of your property; the rebuild cost will generally be lower than
the price to buy it.
Your rebuild cost can normally be found on your home survey/buyer's report. You can also find details
of how to calculate the cost on the BCIS (Building Cost Information Service) website. Many insurers now
provide an automatic limit for rebuilding costs of up to £500,000.
What's the sum insured?
This is the amount of money all your contents will be insured for. It's the maximum amount of money
your uk home insurance provider will pay out to you in the event of a claim.
Make sure you carefully consider the collective cost of all your possessions and don't under or over value
the total worth of all your items. This is important to remember when you make a home insurance comparison.
When looking for a policy, always compare home insurance on a like-for-like basis. Remember that
a cheap home insurance quote may look appealing, but it may not offer you the best level of protection.
Handy hints
Understanding excess
The excess attached to a policy is the amount that you'd have to pay out of your own money
in the event of a claim. Typically, a higher excess will equal lower premiums - but make sure
you’d be able to meet this amount if you did need to claim.
There are 2 types of excess:
- Compulsory excess
This is an amount set by the insurer that you will be obliged to pay in the event of a claim.
Check that you are comfortable with this amount before you buy the policy.
- Voluntary excess
This is an amount that you'd be prepared to pay in addition to the compulsory excess should
you need to claim. A higher voluntary excess may give you cheaper premiums. Be sure you
could comfortably meet this payment if the worst happened.
You can change the excess amount on our quote screen to see how this will affect the
policy prices.
The right rebuild value
When applying for home insurance, you’ll be asked to give your property’s rebuild cost.
This is the amount it would cost to build the property from scratch if it was completely
destroyed. Be aware that this is different from your property’s market value. The cost
to rebuild a property is normally lower than the price it would sell for.
The correct level of cover
Make a detailed list of all the items you want to be covered by your policy along with
their individual costs. By carefully going through all your possessions in this way, you
can help prevent under-insuring or over-insuring your contents. Under-insuring could
leave you out of pocket, while over-insuring could mean you're paying high premiums
for cover you don't need.
If you are a tenant you will generally only need contents insurance for tenants.
Combined cover
Many home insurance companies will offer you the chance to purchase buildings and contents insurance
together, in some cases this could work out cheaper. However, you're able to buy them
as separate policies from two different providers if that works best for you.
Just remember, that in the event of a claim you may have to deal with two insurers
(if there's damage to both buildings and contents). Having both under the one policy
may make the claims process easier.
Specialist Home Insurance
Every home is unique and has different insurance needs. Some homes may be considered
a higher risk for insurers, so a standard home insurance policy might not be sufficient.
The following issues may require specialist home insurance:
Flood risk
Over 5 million people in England and Wales live and work in flood risk areas.
If your property is located in an area that’s at risk of flooding, you may find it more difficult
to get home insurance. Some insurance providers may even refuse to offer you cover.
The damage caused by flood water can be extensive, so insurers often see these properties
as costly claims waiting to happen.
Some specialist home insurers deal exclusively with high risk properties and will be happy
to deal with your application.
Be aware though that your premiums are likely to be high and you're unlikely to be able to find
cheap home insurance quotes.
To find out more, visit The Environment Agency’s website.
Subsidence
Subsidence refers to a downward movement of the ground beneath a property.
Certain types of soils, the presence of large trees near the property or a leaking drain
are common causes.
Signs of subsidence can include the appearance of new cracks in the walls of the property.
These cracks are normally more than 3mm wide and can often be found in weak spots
around doors and windows.
Homes with subsidence can often prove difficult to insure, as underpinning and structural
work may be required. However, don't fear, there are specialist home insurance companies who
will cover homes with this issue. You may find that you have higher house insurance premiums
as a result.
Non-standard properties
If your home is a little different from the norm, a normal home insurance policy may not go
far enough. Non-standard properties can include timber framed properties, thatched homes
and listed buildings.
If you rent your property out you will need Landlord Insurance cover. This is similar to home
insurance but tailored to cover renting out a property to tenants.
These properties can often have very specific insurance needs due to the materials and
construction techniques they involve. If you have a non-standard property, it's worth speaking
to a specialist home insurer who will understand the individual needs of your property.
Optional extras
Some of the following cover may be automatically included in your policy, or might be offered as an optional extra:
Accidental Damage Cover
This can help cover those accidental mishaps that can cost
a small fortune to put right. For example, spillages or DIY disasters could be taken care of by your accidental damage cover. You can have accidental damage for both buildings
and contents insurance policies.
Personal Possessions Cover
Your personal items won't always be kept inside the home. Sometimes you'll want to take these items with you, like your laptop or I-pod. This type of house insurance can offer worldwide cover for items when they're away from home.
Legal Assistance Cover
For maximum protection, it could be worth adding legal assistance to your home insurance. Should you be involved
in a dispute with an employer or neighbour for example, this cover could help you meet legal costs. This could involve
any conflict over boundaries or services you've hired.
Home Emergency Cover
Does what it says on the tin. If there's an emergency in
your home, this can help you sort out the problem quickly
and easily. This can include things like the loss of an essential service (e.g. gas, electricity or water), blocked drains, boiler breakdown or lost keys.
Student Cover
If there are students in your household and you'd like to cover their possessions when they go off to uni, you can add student home insurance cover on to your home contents insurance policy.
Bike Cover
With most contents insurance policies, bikes are not automatically covered. Additional bike cover can help
protect your bike financially if it's damaged or stolen. Insurers may refer to it as cover for 'pedal cycles'.
ID Theft
If you become a victim of identity fraud, this could help you with the associated expenses. For example, the cost of replacing any official documents and recouping any lost money.
Know-how
Take a browse through some of our helpful home insurance articles: