home insurance

buildings, contents, or both - what each one actually covers, how much you need, and the mistake that leaves people underinsured.

buildings vs contents

• buildings insurance covers the structure - walls, roof, floors, fitted kitchens and bathrooms, and permanent fixtures - against events like fire, flood, storm, subsidence and escape of water. if you have a mortgage, your lender will almost certainly require it.
• contents insurance covers your belongings - furniture, electronics, clothes, jewellery - against theft, fire, flood and similar. renters usually only need contents, since the building is the landlord's responsibility.
• combined policies bundle both, often for a little less than two separate ones - but compare, because that isn't always true.

the number that trips people up: rebuild cost

buildings cover should be based on the rebuild cost - what it would cost to knock the house down and build it again - not its market value. the two are often very different, especially where land is expensive. underinsure and an insurer can apply "average", reducing any payout in proportion to the shortfall. overinsure and you're paying for cover you'll never use. surveyors' rebuild calculators and the figure on your mortgage valuation are the usual starting points.

for contents, add it all up

most people underestimate. walk room by room and total what it would cost to replace everything new. don't forget clothes, kitchen contents, garden equipment and anything in the loft or garage. single high-value items - a bike, a ring, a laptop - often have a per-item limit and may need listing separately.

things that are usually optional

• accidental damage - spilling paint on the carpet, drilling through a pipe. not always included as standard.
• personal possessions - things you take out of the home, like a phone or bag.
• home emergency - a plumber for a burst pipe or a locksmith when you're locked out.
• legal expenses - help with disputes, from neighbours to employment.

what affects the price

• where you live - flood risk, subsidence history and local crime rates all matter.
• the property - age, construction, number of bedrooms, and whether it has a thatched roof or non-standard build.
• security - approved locks and alarms can help.
• your history - previous claims, flooding or subsidence.
• your excess - as with any insurance, a higher excess usually means a lower premium.

how to avoid the common traps

• check the rebuild figure, not the sale price.
• read the exclusions - wear and tear, gradual damage and poor maintenance are almost never covered.
• keep receipts or photos of valuable items.
• tell the insurer about changes - building work, a lodger, a home business, or leaving the house empty for long spells can all affect cover.
• don't auto-renew blind - compare each year.

this guide is general information to help you understand the product. it isn't financial advice, and it doesn't take your circumstances into account.