Types of home insurance
Buildings insurance and contents insurance are the two main types of cover that come under the broader term of ‘home insurance’. You can buy these policies separately or take out a combined buildings and contents insurance policy.
If you want both types of cover, it’s often cheaper to buy a combined buildings and contents insurance policy than getting them separately.
Buildings insurance
Buildings insurance provides cover if something happens to the main structure of your property, including any permanent fixtures and fittings.
For example, it can cover your walls, floors, roof, windows, doors, pipes and fixed bathroom and kitchen fittings. It may also cover garages, fences, sheds and other outbuildings.
Essentially, anything that makes up your property that you wouldn’t take with you when you move is likely to be covered by buildings insurance.
Your buildings insurance should cover the rebuild cost of your home. Bear in mind this isn’t the amount you paid for your property or its current market value.
Even though buildings insurance isn’t required by law, many mortgage lenders will only finance your property if you have sufficient buildings insurance in place.
Contents insurance
Contents insurance covers the items in your home. Anything that you can remove and would take with you if you moved house is likely to be covered under contents insurance.
For example, contents insurance can cover furniture, freestanding appliances, electrical devices, jewellery, money, clothing, pictures, ornaments and many other items. Some policies may also provide cover for freezer food and downloaded content.
Bicycles up to a certain value may also be covered under contents insurance while they’re at home. However, you may need to add cover if you want to cover your bike outside the home and, for more expensive bikes, specialist bicycle insurance may be more suitable.
What home insurance covers
Buildings and contents insurance policies typically cover you in the event of any unexpected damage caused by:
- fire
- flooding and water damage
- storm damage (excluding damage to fences, gates and other specified items)
- falling trees
- burst pipes
- subsidence
Home insurance can also provide cover for vandalism and theft.
If your home is uninhabitable, because of flooding, for example, home insurance policies can cover the cover of alternative accommodation.
Some other elements of cover that may be included with more comprehensive policies, or are available to add as optional extras, are:
- accidental damage
- personal belongings or personal possessions cover (for when you take items outside the home)
- high-value cover (if you have a particularly valuable item you need to cover)
- home emergency cover (if an urgent issue affects your home, such as a broken boiler, this can cover the cost of emergency repairs)
- key and lock replacement cover
- legal expenses
- trace and access (which covers the cost of finding and fixing the source of a leak)
You are covered up to the limit specified in your policy. Different limits apply to different aspects of your policy so, for example, policies may offer buildings cover up to £500,000 and contents cover up to £25,000. These sums are the maximum you can claim on each policy.
Providers may also set individual cover limits on other elements of a home insurance policy, such as alternative accommodation, legal expenses and replacement keys.
Always check the cover limits of a policy so, if your building or contents are worth more than the limit, you can look for a more comprehensive policy. On the other hand, if you don’t need as high a limit, you can see if you can find a cheaper policy with lower cover limits.
What isn’t covered
Standard home insurance doesn’t usually include cover for:
- general repairs and maintenance of the property
- wear and tear, including breakdown of household appliances
- any damage caused by negligence and failure to take precautions and keep the property in good condition
- accidental damage (unless added)
- belongings that are lost or damaged outside the home (unless added)
- damage caused by pets
- pests
- periods when your home is unoccupied for a certain number of days
Many insurers state that, depending on the nature of your work, working from home won’t affect your home insurance policy . However, if you run a business from home, this could affect your cover. If you’re not sure whether your working situation will affect your home insurance policy, it’s worth checking with your insurer.
The above list isn’t finite, so it’s important to look at the terms of a policy to see exactly what is and isn’t included and to ensure you get the best home insurance for your situation.
How to get cheaper home insurance
The average cost of home insurance rose 19% between the second quarter of 2023 and the same period in 2024 . While you can’t change some factors that affect the price of your quote, such as the size and postcode of your property, below are some tips that could help to reduce the cost of your home insurance premium.
- Compare quotes. Shop around and compare policies from different home insurance providers to see if you can find cover at a more affordable price. Don’t just auto-renew with your existing provider.
- Improve security. Burglar alarms, outdoor lighting, high-quality locks on your doors and windows and a home security system could help to lower your insurance premium.
- Don’t overestimate the value of your home and contents. The higher the value of your home and contents, the more expensive your premium is likely to be. As a result, you should take time to calculate an accurate estimate of your property and contents so you don’t pay more for your insurance than necessary. But don’t underestimate the value, otherwise you may invalidate the policy or receive less money than expected if you need to claim.
- Check if you need any optional add-ons. You can often add optional cover to your home insurance policy, but this will come at a cost. Think carefully about adding these extras to your policy, otherwise you could end up paying for cover you don’t want or need.
- Pay for your insurance annually. Paying for your home insurance in one annual payment is often cheaper than splitting it into 12 monthly instalments.
- Pay a higher voluntary excess. As well as setting a compulsory excess (which is the sum you need to pay if you make a claim), insurers may also ask if you want to pay an additional voluntary excess. A higher excess could reduce the cost of your insurance premium, but bear in mind you’ll need to pay this sum whenever you make a claim.
- Build up a no claims discount. If you don’t claim on your home insurance policy, you can start to build up a no claims discount (also known as a no claims bonus), which could help you get a cheaper home insurance quote.
