A simples guide

Who needs home insurance?

Need and want are very different – nobody needs chocolate but most of us want it. It’s the same with home insurance  – it’s not something you need by law – but if you love your home and all the things inside, then you’ll probably want it, and you may need it if you have a mortgage. But what exactly is ‘home insurance’ and what does it include? Well, that’s exactly what this page is here to answer – here goes.

What is home insurance?

Home insurance is actually an umbrella term that includes buildings insurance and contents insurance. Both types can be bought separately but lots of people buy them together as a joint policy.

piggy bank and house
New house

What is buildings insurance?

Buildings insurance covers the actual structure of a property – so things like the walls, floors and the roof. It covers your permanent fixtures and fittings within your house, this includes your bath, sink and kitchen units which can sometimes be mistaken as contents. Plus, depending on the policy, it may cover the structure of your outbuildings such as sheds, garages, as well as things like fences. It’s there to provide compensation to policyholders if their property needs to be repaired or rebuilt as the result of an insured event.

When you choose buildings cover, it’s imperative that the policy reflects your needs, especially if you live in a (charmingly entitled) ‘non-standard’ home such as one with a thatched roof. Similarly, if you live in a high risk flood area or your home has a history of subsidence, then make sure you take this into consideration when you’re doing a quote as it could invalidate your policy or future claims if you don’t disclose key facts.

 

Do I need buildings insurance?

It’s not a legal requirement, but if there’s a mortgage on the property, then it is something that most mortgage lenders will insist on borrowers having.

If you rent a property, then you don’t need buildings insurance – it’s your landlord’s responsibility. You should consider taking out contents insurance to make sure your belongings are covered (but more on that later).

What does buildings cover include?

Policies differ according to insurance provider and what one will include as standard, another might not. Typically buildings insurance will cover unforeseen one-off events that damage your house. Standard policies usually include cover for storms, floods, fire, theft, malicious damage and escapes of water (otherwise known as water leaking from pipes and other fixed water installations) and many more examples. Remember your buildings insurance is not a maintenance contract, so if you’re roof suffers from general wear and tear and this turns into a leak, it is unlikely that it wilb be covered by your insurance policy.

It’s also worth noting that some policies won’t cover you if you’re away from home for long periods of time (usually a month or more ). So, if you have a job that takes you away for a while, then make sure you declare this when you get a quote, or if your circumstances change mid-way through your policy check that your existing provider is happy to continue to offer you cover.

What is contents insurance?

Contents insurance covers all the things inside a property that basically aren’t permanently nailed down or part of the structure. So, personal belongings such as furniture, carpets, rugs, clothing and jewellery would all come under a contents policy.

The amount of cover you get depends on the policy you take out, and as a rule – the more expensive your stuff is, the higher your premium. But don’t be tempted to underinsure your prized possessions – it might mean a lower policy price, but it’ll mean you get caught out if and when you try and make a claim; find out more about the pitfalls of underinsurance.

Unlike buildings insurance, your mortgage lender can’t insist on you having contents cover, but considering the average home contains £45,000 worth of belongings – it’s probably a wise thing to have.

Both Buildings and Contents insurance is subject to an excess – much like your car insurance. So, if you make a claim, you’ll be expected to shell out a certain amount – this will have been agreed when you first took out the policy. Generally, the higher the voluntary excess that you select, then the lower your premium. But bear in mind, you will have to pay both your voluntary and compulsory excess combined; so always make sure the total excess is affordable.

Just make sure you’re aware that all your possessions may not be covered everywhere just because you have contents insurance. Contents insurance specifically covers your belongings should they be damaged within the boundaries of your home. If you intend to take jewellery, watches and tech gadgets outside the house and want cover for them while out and about you should look to include personal possessions cover as part of your policy, which is more often than not an optional extra.

What should I consider when taking out contents cover?

It’s hard to estimate the value of what we own, so it’s best to go through any property room by room, not forgetting places like the attic, basements and guest bedrooms. Think about particularly valuable items such as an engagement ring or gadgets like an iPad – if these exceed what’s known as the ‘single item limit ’ then they’ll need to be listed separately. Also, if you’re planning on taking these items out of your home, make sure you state this upfront to get the cover you need.

You can also bolt on extra features so you get a policy tailor made to your needs – things like accidental damage, new for old or Home Emergency cover. Although extras can cost more, they can often be good value for money. For example, Home Emergency cover could help you if your boiler breaks down in the middle of winter, saving you the hassle of finding an engineer to fix the problem for you.

I rent my property – do I still need contents insurance?

Tenants need to insure their own contents and personal  items and will need to take out their own contents insurance, which is sometimes known as renters insurance. The building is the responsibility of the landlord, so they should have their own buildings cover in place. Plus, if the property is furnished, then the landlord is responsible for insuring any contents they own.

Why should I comparethemarket.com?

If you hadn’t guessed, we love a good comparison and we want you to get as much out of it as we do. Comparing the market means you can be confident about finding the right insurance package for your home and your belongings. It’s not about fearing the worst, it’s about making sure someone’s got your back should the worst happen. So, smile and be happy knowing that everything’s safe as houses – comparethemarket.com

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