Home Insurance Explained: Buildings and Contents Cover

Buildings and contents insurance

• Buildings insurance covers the structure of your home: walls, roof, floors, windows, permanent fixtures such as fitted kitchens and bathrooms, and often garages and outbuildings. If you have a mortgage, the lender will almost always require it. In a leasehold flat, the freeholder or management company often arranges it, so check what is already covered.
• Contents insurance covers the things you could take with you if you moved: furniture, clothes, electrical items and personal belongings. Tenants usually need contents coverContents insuranceContents insurance covers your belongings, such as furniture, clothes and electronics, if they are stolen or damaged.Read more → only, because the landlord insures the building.
• Combined policies include both and may be cheaper than buying separately, though not always.

What is usually covered

Most policies cover these "insured events" (also called perils):

• Fire, smoke and explosion
• Storm, flood and escape of water (burst pipes)
• Theft and attempted theft
• Vandalism and malicious damage
• Subsidence, heave and landslip (for buildings)
• Impact by vehicles, falling trees and aircraft
• Loss of rent or alternative accommodation costs while repairs are done
• Legal liability if someone is hurt or their property damaged

How much cover do you need?

Costs: excess, premiums and add-ons

• Premium: the price of the policy. It depends on your postcode, property type, rebuild cost, claims history, security and the level of cover.
• Excess: the amount you pay towards each claim. A higher voluntary excessExcessAn excess is the amount you pay towards each insurance claim before the insurer pays the rest.Read more → can lower the premium, but make sure you could afford it.
• Add-ons: accidental damage, home emergency, legal expenses and personal possessions cover are common. They can be good value, but check what they add, and whether they duplicate cover elsewhere, for example your bank account benefits.

Common exclusions and conditions

Read the policy to understand what is not covered. Typical issues include:

• Wear and tear and gradual damage, such as rust, damp or rot
• Unoccupied properties. Policies often limit cover if the home is empty for 30 or 60 days.
• Security requirements, such as approved locks, which you must have for theft claims
• Business use. If you work from home, tell your insurer, because some policies exclude business equipment.
• Subsidence exclusions or higher excesses in some areas
• Pre-existing damage
• Maximum limits for particular items such as cash or jewellery

Flood insurance and Flood Re

If your home is at risk of flooding, premiumsPremiumA premium is the amount you pay for an insurance policy, either as a lump sum or in instalments.Read more → may be higher. Flood Re is a UK scheme that helps insurers offer affordable flood cover for homes built before 2009 by limiting the flood element of the premium. It is accessed through your insurer or broker. Some properties, such as most buy-to-lets and homes built after 2008, are excluded. You can check flood risk using the government's flood risk checker.

Telling your insurer the truth

When you buy or renew, you must answer questions honestly and accurately. Under the Consumer Insurance (Disclosure and Representations) Act 2012, you must take reasonable care not to make a misrepresentation. If you give false or careless answers, the insurer may reduce your claim or cancel the policy. Tell your insurer about changes such as a new extension, building work, a lodger or running a business.

How to compare policies

1. Decide what cover you need. Buildings, contents, or both. Accidental damage or not.
2. Get quotes from several places. Use comparison sites and check direct insurers that are not on them.
3. Compare like with like. Look at the cover limits, excess, exclusions and add-ons.
4. Check the insurer. It should be authorised by the Financial Conduct Authority, which you can verify on the FCA Register.
5. Read the policy summary and the Insurance Product Information Document (IPID).
6. Consider the claims record. Customer service matters when something goes wrong.

Renewals

Since January 2022, the FCA has required insurers to price renewals no higher than the price they would offer to a new customer through the same channel. This is intended to end "price walking". It is still worth shopping around each year, because prices vary between insurers. Review your sums insured, because rebuild costs and contents values change.

Cutting the cost

• Increase security with approved locks and alarms
• Raise the voluntary excess to an amount you can afford
• Do not over-insure. Make sure the sums are right.
• Do not claim for small amounts, since claims can raise future premiums, but do not leave serious damage unreported
• Compare every year. See how to cut household bills.

If you need to claim

Contact your insurer as soon as possible, take photos, keep receipts and take steps to prevent further damage. For full steps, see how to make an insurance claim.