A simples guide

Is home insurance a legal requirement?

Here, we’ll look at those situations where there is a legal requirement to have home insurance in place, and others where it is perhaps more a case of common sense.

It’s easiest to look at home insurance and content insurance as it affects various groups, and address each in turn.

1) You own your house but have a mortgage outstanding on it

If you’ve a mortgage on your property your mortgage lender has a big financial interest in your property, they will make it a condition of the mortgage that your home has adequate home buildings cover (building insurance covers the structure, including fixtures like your bath). So, for example, if your building was uninsured and the house burned down, they would lose their money too.

The condition will be mentioned in your terms and conditions of your mortgage agreement and will have been discussed with you when you took out the mortgage.

Unlike buildings insurance cover, there is no requirement to take out home contents insurance (Imagine you could turn your house upside down and shake it about a bit. Contents insurance covers everything that ends up on the floor – we’re talking furniture, jewellery, clothes and fridge freezers). If times are hard, or you’re looking to save money, it might be tempting to consider forgoing protection.

Think hard though, if the worst ever happened you would lose everything and have no compensation whatsoever. Is it really worth the risk?

2) You fully own your home

If your home is owned outright, there is no legal obligation to have either home buildings or home contents insurance.

That said, your home is likely to be the largest asset you and your family own. The contents are likely to be second or third largest too. Is it worth the risk or losing everything for the sake of the saving on an insurance premium?

Is home insurance a legal requirement?
living room - is it illigal not to have home insurance?

3) You’re in a leasehold building

If you’re in a leasehold property, there is the possibility that you’ll have to pay for buildings cover. This should be covered in the leaseholder agreement for the building. Even if you do have to pay for the cover, it is likely to be taken as part of the service charge on the property.

You’ll need to take out your own contents insurance as usual, but again this isn’t mandatory.

4) You’re a landlord

If you’re a landlord with a buy-to-let mortgage, you’ll find that the lender insists on building cover in the same way as they would under a standard mortgage.

If you own the building, while there is no legal obligation to have building cover, you’d be slightly crazy not to take it out. You’d essentially be risking losing your investment if the worst was to happen.

Many insurance providers offer landlord insurance. Though policies vary from provider to provider, decent cover will usually cover the building, liability cover and some provision for loss of rent with additional options available. Use our landlord insurance comparison service to find the right deal for you.

5) You’re renting

If you’re renting privately, it is the landlords responsibility to insure the building.

You will though, need to arrange your own contents insurance, but again this isn’t mandatory.

Whatever your situation, it always makes sense to compare the costs of both buildings and contents insurance. Doing so couldn’t be easier than doing it with us.

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