Insuring your first home

Putting that first foot on the property ladder is a major financial commitment, so you’ll want to make sure your investment is properly protected. Here’s our guide to the ins and outs of home insurance when it comes to buying your first house.

Putting that first foot on the property ladder is a major financial commitment, so you’ll want to make sure your investment is properly protected. Here’s our guide to the ins and outs of home insurance when it comes to buying your first house.

Chris King
From the Home team
5
minute read
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Posted 26 JANUARY 2021

Home insurance for first-time buyers

Once you’ve got your mortgage sorted, part of the later stage of the house-buying process involves getting home insurance. Yes, just as you’ve ticked one thing off your to-do list, there’s something else to arrange…

As a first-time homeowner, there are two types of cover you’ll need to think about: buildings insurance and contents insurance.

You can buy buildings and contents insurance as two separate policies, or you can combine them into a single policy. If you’re looking to save money on your home insurance, a combined policy could work out cheaper.

Buildings insurance

Home insurance isn’t a legal requirement. But your mortgage provider will most likely insist you have adequate buildings insurance in place as a condition of their offer.
Buildings insurance covers the structure of your home, including walls, doors and fitted kitchens and bathrooms. It protects you against damage caused by:

  • flooding
  • subsidence
  • fire
  • storms
  • burst pipes and water leaks
  • theft

Most policies will also cover outside structures such as garden walls, fences and garages.

How much does buildings insurance cost?

According to Compare the Market data, the average monthly cost of buildings insurance is £9.55**.

Buildings insurance is calculated on the rebuild value of your home if it’s destroyed beyond repair. For that reason, it’s important to make sure you have an accurate idea of the cost of rebuilding your home from scratch, rather than its market value. Read our guide for more information on how to calculate the rebuild cost of your home.

How much you pay for buildings insurance also depends on whether you live in an area prone to flooding.

**50% of people could achieve a quote of £9.55 per month for their buildings insurance based on the monthly cost when paying for the policy in one annual payment, excluding any interest charged on instalment payments. Based on Compare the Market data in November 2020.

Contents insurance

Contents insurance covers the cost of repairing or replacing your home contents if they’re damaged, destroyed or stolen.

‘Contents’ are defined as anything you’d take with you when you move, so that includes furniture, clothing, jewellery, appliances, entertainment equipment and so on. In other words, your household belongings.

How much does contents insurance cost?

According to Compare the Market data, the average monthly cost of contents insurance is £5.66***.

While contents insurance isn’t a legal requirement, it’s a small price to pay for peace of mind. The cost will largely depend on the location of your new home and the total value of your possessions. You can work this out by adding up how much it would cost to replace each item, rather than the current value.

***50% of people could achieve a quote of £5.66 per month for their contents insurance based on the monthly cost when paying for the policy in one annual payment, excluding any interest charged on instalment payments. Based on Compare the Market data in November 2020.

What optional extras can I add?

When buying your home insurance, there’s often the option to add additional cover to your policy, which might include:

  • Accidental damage – this covers damage to your property or contents that is the result of an accident. For example, if you spill red wine on your carpet or break a window.
  • Legal expenses – covers the cost of legal expenses relating to your property, such as claiming compensation after an accident in your home or boundary dispute costs.
  • Cover away from home – covers your belongings if you take them out and about with you, like a laptop.

  • Home emergency cover – covers the cost of emergency repairs and labour if you have a burst pipe, for example.

Optional extras will likely increase the cost of your premium. A premium is the amount you pay either monthly or annually for an insurance policy.

Availability and cover levels of optional extras vary among providers so, before you buy, check the policy covers what you actually need.

When should I buy home insurance?

You should have your buildings insurance in place from the moment you exchange contracts on your new home. That’s because you become legally responsible for the property from this point, even though there may still be a while to go before you move in.

You might also need contents insurance in place before you move in as your belongings could be damaged in transit. To be covered for this though, you may have to use a professional removals firm.

Other insurance to consider when buying a house for the first time

If you’re taking out a mortgage for the first time, it could be worth thinking about additional insurance to protect your mortgage repayments. This might include:

  • Life insurance - cover your mortgage in the event of your death. This could be particularly relevant to you if you have a young family.
  • Critical illness cover - this is typically bought as an add-on to a life insurance policy. It provides a lump-sum payment that could help pay off your mortgage if you’re diagnosed with a serious condition like a heart attack, stroke or cancer.
  • Income protection - get a tax-free monthly income if you become ill or are injured and unable to work.

Where can I buy home insurance?

Buying your first home doesn’t come cheap, so you’ll want to save money where you can. Shopping around and comparing quotes is an ideal way to find a good deal on your home insurance.

Comparing with us could save you up to £107.00^^ on your buildings and contents insurance. And if you’re setting up utilities, we can also help you find great-value energy deals.

Start a quote today, and see if you could cut some of those first-time buyer costs.

^^Based on online independent research by Consumer Intelligence during February 2021. 50% of customers could achieve this saving on their Buildings and Contents insurance through Compare the Market.

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