Home and Contents Insurance

What is home and contents insurance?

Home and contents insurance policies cover your home and your treasured possessions.

Buildings Insurance

Buildings insurance covers the building itself against damage
caused by events like fire or floods. As well as the bricks and mortar itself, it will also cover permanent or fitted fixtures, internal or external fittings, as well as any outbuildings that form part of your home (for example a shed or garage).

If you own your own home, it is essential to take out buildings
insurance. In fact, when taking out a mortgage your lender is likely to insist on buildings insurance as a condition of your mortgage offer.

How much cover do I need?

The policy should be sufficient to cover the full cost of rebuilding your property. Rebuild costs are calculated by insurers in different ways, including the value stated on your home survey and the number of bedrooms you have.

Most policies have a standard level of cover, although some policies go further by offering what is termed ‘unlimited’ cover, where the actual rebuild cost is paid regardless of whether your home has increased in value since you bought your policy. Calculating the rebuild cost of your home is an essential part of applying for buildings insurance, and you need to be aware that that the rebuild cost will usually be lower than its market value. That’s because it only takes into account the cost of the labour and materials that would be needed to complete the rebuild – it doesn’t include the price of the land the building sits on.

If your cover level is automatically calculated by an insurer, you must disclose anything unusual about your home, such as the age of the property, any construction features (e.g. a thatched roof)
and whether or not it has outbuildings. You must inform your insurer of any extensions or alterations to your home, otherwise you could run the risk of being underinsured.

Contents Insurance

Contents insurance protects your household goods and
personal possessions, such as electrical goods, jewellery,
clothes and furniture.
You can usually add various options to your contents insurance that will provide additional cover, including accidental damage cover and cover for possessions outside of the home. Some insurers will have these cover options as standard.

Tenants

If you’re renting a property you probably won’t need buildings insurance (as this will be the responsibility of the property owner) but you will need contents insurance. How much do I need?

How much cover do I need?

Most insurers offer a standard level of cover, usually between
£40,000 and £50,000, which is likely to be sufficient for most households. However, it’s important not to underestimate the value of your possessions. You should consider every item you own and how much it would cost to replace it on a `new for old’ basis. Check you haven’t forgotten anything hidden in the attic, cupboards and garages, or any expensive items associated with pets or hobbies, for example a kennel or golf clubs, etc.

Combined policies

As well as offering a standalone home or contents insurance policy, most insurers offer ‘combined’ policies which will include both features. This is normally the most convenient and cost-effective policy if you need both types of cover.

What isn’t covered?

It’s important to check that you have the most appropriate cover for your circumstances and that no important features are missing, before taking out
a policy. For example, accidental damage is covered as standard by some insurers,
but is an additional option with others.

If you are a frequent traveller and often leave your property unattended for long periods of time (in most cases for more than 60 days) your insurance may not be valid, particularly for damage caused by things like water leaks.

All insurers will have a range of common exclusions, including damage caused by war or acts of terrorism, as well as damage to
gates and fences caused by storms or floods.

Will I be covered for accidents?

Most contents policies will automatically cover you for the consequences of specific
events, such as flood and fire. But not all will include `accidental damage’ as standard, so check your policy carefully.

Accidental damage will cover you, for example, if you were to spill paint on your carpet, break an ornament, or put your
foot through the ceiling whilst clambering around in the loft! As most households will suffer this type of mishap at some point or another, you may decide it’s a feature you can’t do without.

What about flooding?

Flooding is a massive issue for many parts of the UK and can be a nightmare for homeowners who either don’t have any cover, or have the wrong level of cover. If you are living in a high flood risk area, it is vital to arrange home and contents insurance that will cover you for any financial damage that could potentially be caused by flooding.