From homeowners to those who rent, nearly everyone needs home insurance of some sort to protect their property and possessions.
But when you’re comparing quotes from comparison sites and brokers it’s important to understand the different types of home cover available, and also the extras you might need to add to a policy.
The level of cover you require will largely depend on a number of factors; how much your possessions are worth, whether you own your home or rent it, the size of the property and where it is, the building’s age and what security you have.
Two main cover elements: Buildings and contents insurance
‘Home insurance’ is a catch-all term that consists of two main elements: buildings insurance and contents insurance. These can be bought separately or together and when you’re gathering house insurance quotes you’ll be offered deals which combine them in one policy, which is usually the most cost-effective way of buying the two types of cover.
Home insurance companies’ policies vary by provider, and the level of cover that comes as standard depends, to a degree, on how much you want to spend. But there are a number of features which are common to most:
1. Buildings insurance
If you imagine turning your home upside down and gently shaking it, buildings insurance covers everything that doesn’t fall out; the walls, roof, windows, doors as well as fitted kitchens and bathrooms.
- Buildings insurance covers you for the effects of, among other things, fire, flooding, subsidence, storm and tree damage, burst pipes and malicious acts.
- It’s there to financially protect you if your home is completely destroyed and needs re-building from scratch, or if it’s partly damaged and needs repairing.
- The level of cover you need should be based on the amount it would cost to totally re-construct your home (i.e. all the associated building, architectural and legal costs), not its current market value.
- A decent policy will also include cover for outbuildings and other structures such as garages, barns, sheds and garden walls, but cheaper policies might not.
Who is, and isn’t, buildings insurance for?
buildings insurance is for:
- Those who own a home, either outright or via a mortgage (it’s a legal requirement if you have a bank loan)
You shouldn’t need buildings insurance if:
- You own a leasehold property as buildings insurance is usually the responsibility of the freeholder, often arranged via a managing agent.
- You rent your home, in which case buildings cover is the responsibility of your landlord.
2. Contents insurance
If you imagine turning your home upside down and shaking it, contents cover is there to protect everything that falls out, and includes fixtures and fittings such as carpets, curtains, cookers and white goods.
- Whether you rent or own your home, your possessions need insuring against loss, theft or damage.
- Contents cover financially protects the contents of your home from the effects of such events as burglary, fire, burst pipes, storm damage and flooding.
- Transportable possessions are seen as ‘contents’, including electrical items and gadgets such as tablets, smartphones, televisions, stereo systems, as well as antiques, furniture such as sofas and dining tables, jewellery, musical instruments, bicycles and clothing.
- ‘Fixtures and fittings’ such as carpets, cookers, fridges, freezers and curtains are also included under contents cover.
Who is, and isn’t, contents insurance for?
Unlike buildings cover, contents insurance isn’t compulsory if you have a mortgage. And if you rent, you can also choose whether to have it or not.
However, as Sainsbury’s Bank recently put the cost of replacing the average home’s entire contents at £55,000, it’s well worth having!
Additional cover you might want to add to a policy
While those elements described above are common to nearly all home insurance policies, and come as standard, you might need certain policy extras, or ‘add ons’, to ensure you’re covered for all eventualities. Such extras may or may not also be included as standard in the policy you buy, so it’s worth checking if they are. ‘Add ons’ usually include:
- Away from home cover
- Accidental damage cover
- Legal insurance cover
- Home emergency cover
- Key and lock cover
- Extra cover for specific items of high worth.