Making Sense of Home Insurance: Do I Need Building and Contents Insurance?

Your home is your castle: it’s where your family grows, makes memories, and it’s your sanctuary where you unwind. It’s also likely to be the most expensive item you have ever (and will ever) purchase. From locking the doors at night to checking the smoke alarms monthly (you do that, right?), there’s a lot you can do to safeguard your precious house. Taking out a home insurance policy is one of the best places to begin to give your property – and pocket – the best protection.

Not only is it smart to get insurance, but it’s often necessary. If you’re taking out a mortgage for a property purchase, your lender will require you to get some building insurance cover in place.

What is home insurance?

Home insurance is a policy for homeowners that protects a property after a peril. It helps to rebuild, repair and replace your house and belongings after a covered event.    There are three types of home insurance:

• Building insurance: protects the structure of the home  

• Contents insurance: looks after your possessions  

• Building and contents insurance: combines the two coverages  

You can buy building and contents insurance policies separately from different insurance providers. Or you can minimise admin and fees by purchasing from the same insurer. Along with saving time and money by using the same insurer, you’d only need to deal with one insurer if you needed to file a claim.

Building and contents insurance

Before diving into buying a policy, let’s start with the basics.

What does building insurance cover?

Building insurance covers the physical structure of the property, such as the walls, roof, doors, windows, flooring and any fixed structures such as kitchen cupboards and the bathroom suite. Essentially, it covers everything that’s fixed down.    Building insurance protects you from devastating events. Most policies cover: 

• Vandalism 

• Subsidence 

• Fallen trees 

• Fire and smoke damage 

• Natural events, such as storms and floods 

• Water damage from leaking or burst pipes

This type of home insurance often pays out the cost of emergency temporary accommodation if you can’t live in your home because of the damage from a covered event. That means you won’t be made homeless while your home is being repaired.

While building insurance covers a lot, every policy will have its limits. General wear and tear aren’t normally covered in policies. Pests, leaking gutters and frost also tend to be excluded.

Now you’re thinking, “I need this coverage. So how much is buildings insurance for my property?” Since no two homes are alike, policy coverages and costs will vary. When looking for coverage, your insurance advisor will want to know if you’ve made an insurance claim before, if your property is located in a high-risk area (floods, crimes, etc.), if your property is Grade 1 or 2 listed, the age of your property and if you work from home or run a business from home.

How much coverage you need will also impact the cost. You can keep the cost down by combining your building insurance with contents insurance, paying annually instead of monthly and making use of any offers.

As you can see, there are many variables. It’s smart to work with a knowledgeable insurance advisor who can team you up with the right coverage to protect your home and belongings, all at the right cost.

What does contents insurance cover?

Contents insurance protects your personal belongings, such as the items you’d take with you when you move. A common way to visualise this is to imagine you tipped the house upside down – whatever falls out is classed as contents.    

Your policy will cover your possessions like electricals, clothing, appliances and furniture. Keep in mind that individual items will only be covered up to a certain amount – this is called a single-item limit. For many insurers, the limit is £1,000.    

For items worth over £1,000, they’ll need to be listed separately on your policy if you want to cover them for their full value. If you have a family heirloom or precious piece of artwork in the loft, consider taking out additional coverage to protect these items.   

The contents insurance in your home insurance typically covers events such as: 

• Fire damage 

• Storm and flood damage 

• Burst pipes 

• Theft and burglaries 

• Fallen tree damage 

• Subsidence (when the ground beneath your property sinks) 

There are optional extras within contents insurance: 

• Personal possessions cover for those high-value items that you take outside of the home (such as your smartphone and laptop) 

• Coverage abroad if you lose or damage your belongings while you’re away   

How much contents insurance do I need?

Before you pluck a number out of thin air, spend some time calculating the value of your household items. Move room by room, recording an inventory. According to ABI, the average UK household owns £35,000 of stuff, so you may be sitting on more valuable items than you think. 

It’s wise to work with an insurance advisor to make sure you’ve covered all bases when it comes to protecting your home and belongings. Until the worst happens and you’re without your house and prized possessions, you may not know how important insurance is. However, securing the right policy for your needs and budget is a great way to give you peace of mind and protection, all in one. 

Quick fire tips:

• When taking out a mortgage, your lender will require you to take out at least building insurance.  

• If you’re in the home-buying process, save time by lining up building insurance quotes so that you’re ready to buy a policy by the time you exchange contracts. 

• A good place to start is to conduct a home inventory so you know the value of your belongings. It may take a weekend, but it’s worth it to protect your prized possessions. 

• Work with a trusted advisor. They’ll be able to compare building and contents insurance and find policies to suit your budget. 

• Once you have your home insurance policies in hand, read them through carefully. It’s critical to know what is – and isn’t – covered.

Find your ideal home insurance policy

Protecting your home and belongings starts with home insurance that includes both building and contents insurance. For quotes on home insurance that suit your budget and property, whether you’re looking for cheap home insurance or all-encompassing coverage, our experienced experts are ready to help. Contact us today to get started.