Home insurance is a crucial form of financial protection for your property and possessions. While it is not a legal requirement in the UK like car insurance, it is highly recommended. If you have a mortgage, your lender will almost certainly require you to have at least a basic buildings insurance policy in place to protect their investment.
This guide breaks down the types of cover, what’s included, key terminology, and how to get the right policy for your needs.
1. The Two Main Types of Home Insurance
UK home insurance is typically split into two main parts. You can buy them separately, but often get a better deal by purchasing them together as a combined policy.
A. Buildings Insurance
This covers the physical structure of your home and its permanent fixtures.
- What it covers: The cost of repairing or rebuilding your home if it’s damaged by an insured event. This includes the walls, roof, floors, windows, and doors. It also covers permanent fixtures and fittings like kitchens, bathrooms, and built-in cupboards.
- Who it’s for: Essential for homeowners and landlords. If you are a tenant, the building is your landlord’s responsibility.
- Key Consideration – Sum Insured: You must ensure your cover is for the full rebuild cost of your home (the amount it would cost to completely rebuild it from the ground up), not its market value. The market value is almost always higher as it includes the land. You can find a rebuild estimate using the Building Cost Information Service (BCIS) calculator or by consulting a surveyor.
B. Contents Insurance
This covers your personal belongings and possessions inside the home.
- What it covers: The cost of repairing or replacing your belongings if they are damaged, destroyed, or stolen due to an insured event. This includes furniture, electronics, clothing, jewellery, appliances, and sometimes even food in the freezer.
- Who it’s for: Everyone—homeowners, landlords (for furnished properties), and tenants.
- Key Consideration – Sum Insured: You are responsible for calculating the total value of all your possessions. It’s easy to underestimate this amount. Go from room to room and add up the cost to replace everything. Be aware of single-item limits: Most policies have a limit (e.g., £1,500) for any single item. You must ‘specify’ high-value items like expensive jewellery, watches, or art on your policy to ensure they are fully covered.
2. What Does It Cover? Standard ‘Perils’
Policies cover damage caused by specific events, known as ‘perils’. Standard policies typically include:
- Fire, explosion, lightning, and earthquake.
- Storm and flood damage.
- Theft or attempted theft (often with forcible and violent entry conditions).
- vandalism or malicious damage.
- Escape of water (e.g., burst pipes, leaking washing machines).
- Falling trees or branches.
- Subsidence, heave, and landslip (often subject to a higher excess).
- Damage caused by vehicles or animals.
- Broken glass and sanitary fixtures.
Always check your policy documents (the Policy Wording) for the exact definitions and exclusions.
3. Additional and Optional Coverages
You can often enhance your policy with add-ons for more comprehensive protection.
- Accidental Damage: Covers mishaps like spilling red wine on the carpet, putting your foot through the loft ceiling, or breaking a window. This can often be added to both buildings and contents sections.
- Personal Possessions (or ‘All Risks’) Cover: Extends your contents insurance to cover specified portable items (e.g.,手机, laptop, camera, jewellery) outside the home anywhere in the UK, and sometimes worldwide.
- Legal Expenses Cover: Helps pay for legal costs in disputes, such as employment issues, consumer disputes, or personal injury claims.
- Home Emergency Cover: Provides 24/7 call-out and repairs for urgent issues like a burst pipe, broken boiler, failed electricals, or pest infestation. It covers the call-out and initial repair to make the situation safe, not a full replacement.
- Bicycle Cover: Extends cover for bicycles away from the home, often with lower excesses than a standard contents policy.
- Tenant’s Liability: For renters, this covers damage you accidentally cause to your landlord’s building or fixtures (e.g., spilling a drink on their wooden floors).
4. Key Terminology to Understand
- Premium: The amount you pay for your insurance policy, either annually or monthly.
- Excess: The amount you have to pay towards any claim. There is usually a compulsory excess (set by the insurer) and a voluntary excess (which you choose to increase to lower your premium). A higher voluntary excess means a lower premium.
- No-Claims Discount (NCD): A discount you earn for each year you don’t make a claim. It can significantly reduce your premium over time.
- Exclusion: Something that is specifically not covered by the policy (e.g., general wear and tear, damage from pests if the home wasn’t well-maintained).
- New-for-Old: Most contents policies are on a ‘new-for-old’ basis. This means they will replace old items with brand new equivalents, without deduction for wear and tear.
5. What Affects the Cost of Your Premium?
- Location: Areas with higher crime rates or a history of flooding or subsidence will have higher premiums.
- Property Type and rebuild cost: Larger, older, or non-standard construction homes can be more expensive to insure.
- Level of Cover and Excess: The higher your sum insured and the lower your excess, the higher your premium will be.
- Security: Having approved locks (e.g., five-lever mortice deadlocks on doors), window locks, and a burglar alarm can lead to discounts.
- Claims History: If you have made claims in the past, you are seen as a higher risk.
- Occupation: Some professions may be associated with lower risk.
6. Making a Claim
- Contact your insurer as soon as possible. Most have 24/7 helplines.
- Have your policy number ready.
- Provide details of what happened, when, and the extent of the damage.
- Document the damage with photos or videos before you start any temporary repairs.
- Keep receipts for any emergency repairs you had to make to prevent further damage.
- For theft, you will need a crime reference number from the police.
7. Tips for Getting the Right Cover
- Don’t Just Opt for the Cheapest Price: The cheapest policy often has the most exclusions and the highest excess. Check what you’re getting for your money.
- Value Your Contents Accurately: Underinsurance is a major issue. If you undervalue your contents, the insurer may reduce any payout you claim.
- Be Honest and Accurate: Always provide correct information when applying. Failure to disclose relevant information (e.g., previous claims, a history of subsidence) could invalidate your policy.
- Shop Around at Renewal: Insurers often offer competitive introductory prices. Use comparison websites and don’t be afraid to haggle with your current provider to match a better quote.
- Review Your Policy Annually: Your needs change. You may have bought new high-value items that need to be specified on your policy.
