HOME insurance can save you thousands of pounds if something goes wrong at your property – we explain the different types of cover and how to find the best prices.
Like with most policies, don't focus just on cheap home insurance, you'll want to make sure you're property and your belongings are fully covered so you're as protected as possible.
What is home insurance?
Home insurance protects your home against damage such as if you are burgled, have a fire or flood.
It also covers your personal items such as furniture or clothes, jewellery and laptops if they are stolen or damaged.
There are two main types of home insurance: buildings and contents.
Buildings insurance covers your physical property – so its actual structure, its fixtures and fittings – while content insurance looks after your belongings.
Many insurers offer policies which combine both.
If you're a homeowner, you'll want to think about this type of policy. If you're a renter, your building insurance should be taken care of by your landlord but you should still consider getting contents insurance for your possessions.
What does home insurance cover?
The coverage you receive depends on the type of home insurance policy.
All your personal belongings are generally covered by home contents insurance, so things like clothing, furniture and jewellery will be insured.
This would cover the cost of replacing the items rather than what you paid for them, which could be different.
The level of cover varies wildly between policies but you'll typically be covered against theft, fire and flood damage too.
Additional extras like "personal possessions" cover will protect you for belongings that you take outside your home.
Contents insurance, unlike buildings insurance, won't provide cover for the actual structure of your home.
Make sure you know what your limits are and what you'll be covered for before taking out a policy.
Building insurance covers the big things, such as the cost of repairing or rebuilding your home if it's seriously damaged.
Again policies vary between insurers but according to the Money Advice Service, generally you'll be able to claim if your home is damaged by:
- Subsidence (if the foundations become unstable)
- Water damage from leaking pipes
- Events such as storms and floods
Some policies might also cover other structures around your property such as driveways and garages.
Be aware that typical exclusions – things you won't be covered for – include leaking gutters, damage caused by pets, and storm damage to fences and gates.
Which companies offer home insurance?
THE following providers are just some of the big names that sell home insurance products:
- Bank of Scotland
- Bradford & Bingley
- Direct Line
- John Lewis
- Legal & General
- Lloyds Bank
- More Than
- Quote Me Happy
How much is home insurance typically?
The cost of home insurance is influenced by several factors.
Your buildings insurance will be determined by where you live so insurers will consider burglary rates and flood risk.
Some providers may also want to know the size of your property, as a larger home would cost more to rebuild if it was destroyed.
The materials used to build your home can also have an influence, as an old church or barn may cost more to protect or require specialist cover.
There may also be requirements on the type of locks and alarms you have, to keep your home secure and reduce your premium.
Additionally, contents insurance will be calculated by how much you say your possessions are worth if they had to be replaced.
This includes your clothes and furniture, as well as fixtures and fittings such as your kitchen and bathroom.
The higher the value, the larger the premium you will have to pay.
You may have to declare specifically valuable items such as a diamond ring, as this could require extra cover that can push the cost up.
Some comparison websites may require you to disclose items worth £1,500 or more.
Is home insurance mandatory?
There is no legal requirement to have home insurance but it is worth considering to protect yourself, particularly with buildings cover.
Your home is probably your most valuable asset, so it is worth protecting it against damage.
Otherwise you are left with no protection and a big bill such as if a leak causes your ceiling to collapse.
Additionally, mortgage lenders require buyers to have buildings insurance in place.
You can either purchase it from them or shop around for the best home insurance deals.
This protects them and you.
Your mortgage lender would still want its loan repaid even if the property burns down.
Buildings insurance would cover you for damage and the cost of rebuilding your home, keeping you and your mortgage lender happy.
What type of home insurance do I need?
Homeowners are required by their mortgage lender to have buildings insurance.
There is no requirement if you don't have a mortgage, but it can still be worth it to avoid large bills for repairs – or to rebuild your house if it is badly damaged by a flood or fire.
Owners of leasehold properties may have the communal areas covered by a service charge and could still have to insure their own property. It is best to check your lease.
Renters usually only have to pay contents insurance, as a landlord will have their own cover for the building.
If you are renting out a property, you may also want landlord insurance to protect your fixtures and fittings.
Although not compulsory, it is still worth covering your possessions using contents insurance whether you are a homeowner or a renter. It can help pay to replace damaged, lost or stolen items; such as if there was a burglary or a leak at your home.
How much cover do I need?
Your home insurance needs to provide enough cover to rebuild your home or replace your personal possessions.
There are a couple of different ways of calculating this and it will vary by provider.
Some will use a "bedroom rated method."
It would estimate the cost of rebuilding your home for buildings insurance based on the number of bedrooms.
Similarly, it will work out the value of contents cover based on how manwy bedrooms you have.
Alternatively, you can use a "sum insured method," where you provide the cost, typically by using a chartered surveyor, of rebuilding your property.
The cost of rebuilding your property will be different to its market value as it is based on labour and materials rather than your local housing market.
You may also be able to value your possessions for contents insurance this way, but remember it will be the cost of replacing them at today's value, which could be lower than what you initially paid.
There will also be limits on how much you can claim for a single item so check this is high enough.
You may need extra to cover to protect specific high value items above an insurer's limit.
Does working from home affect home insurance?
Some insurance policies may have exclusions if a property is used for business purposes.
Many of these restrictions were relaxed during the coronavirus pandemic as much of the UK was forced to work from home.
It is best to check your insurance policy though, as it may not traditionally cover items you only use for work such as computers or stock and supplies.
You may need separate business insurance to cover these in case they are stolen or damaged by a storm, fire or flood.
Does home insurance cover boilers?
Boiler breakdowns can be one of the most common household issues.
It can be a pain having no hot water or heating and expensive to fix.
Some home insurance policies may automatically cover boiler care or you may need to purchase this as an extra.
This is typically known as home emergency cover.
Alternatively, you could purchase a separate boiler cover policy from a specialist provider or a repair plan from your boiler manufacturer.
You would need to compare what these types of policies protect and the costs.
Does home insurance cover roof leaks?
If an unexpected event such as a storm damages your roof and causes a leak then an insurer is likely to cover you.
It gets a bit more complicated if there is no obvious storm damage.
Insurers have a get-out on claims based on wear and tear, so if you haven't maintained your roof to a decent standard and it leaks then you could be held responsible for the full cost of the repairs.
Does home insurance cover rising damp?
Rising damp is caused by a combination of damp and condensation.
Most insurers won't cover you for this as a requirement of your policy is that you keep your home in good condition.
If your home has rising damp then it is not in good condition, according to insurers so it is best to get this addressed first.
Insurance typically only covers one-off events whereas rising damp takes a while to do damage your home.
Rising damp also has to be declared to an insurer when you first buy the policy as it could otherwise invalidate your cover.
Does home insurance cover mobile phones?
Most home insurance policies would cover a mobile phone if it was lost, stolen or damaged.
Check the claims limit for individual items though as sometimes the phone can be worth more.
If your phone was lost or damaged and worth more then you may be better off adding it as a specific item or getting an extra or separate policy that covers gadgets.
Also check if you have accidental damage cover that would pay to fix your phone, such as if you drop it or put it in the washing machine.
Alternatively, your insurance may only cover your phone if it is damaged in a fire or flood at your home.
Check your insurance policy to see what level of cover you have for items you take outside your home.
You may need to specify the value of your phone and check it is covered so you have protection in case it is stolen or damaged while you are out and about.
How soon can you claim on home insurance?
Your policy will have a start date that should be agreed at the time you make your application.
So if you start home insurance and your home floods the day after, then you should be covered.
The start date may be different to when you start paying, especially if you settle your premium upfront, so check when you need it to begin.
An insurer usually won't cover pre-existing damage, so your home and belongings will only be protected for incidents that take place once the policy has started.
Can I change home insurance at any time?
Like all insurance products, you have a 14-day "cooling-off" period where you can cancel and change your home insurance without charge.
This could be because you have changed your mind and found a better cheap home insurance deal.
After this period you are typically locked-in for a year and may have to pay cancellation fees if you want to move.
An insurer may refund your premiums for however long is left on your policy if you paid in advance, but any cancellation fees could outweigh the savings you are getting with another deal.
Another option could be to wait for your renewal date when you can switch for free.
You will be contacted by your current insurer in the weeks before your policy expires.
They should tell you what your new premium will be and how it compares to what you previously paiud.
Your loyalty doesn't pay when it comes to renewal time.
Firms usually offer their best deals to new customers to try to get them to switch – so make sure you shop around when your policy is coming up for renewal.
You'll most likely be able get a much cheaper deal than what your current provider is offering – just make sure you're happy with the level of cover they're offering.
What are home insurance add-ons?
Most insurance policies will cover your home and possessions against unexpected loss or damage as standard.
But there may be optional elements of cover that you can add.
This includes cover if your boiler breaks down or if a pet causes accidental damage.
You can also purchase extra cover for more expensive gadgets as an add-on.
Some policies may additionally offer legal expenses insurance to provide financial support for disputes with neighbours or builders, or if someone gets hurt in your home. This could also be included automatically.
How high should someone set an excess?
The excess is the amount you pay a home insurer when you make a claim.
It is your contribution towards a claim and can either be deducted from a payout or paid separately.
A compulsory excess is added to the policy automatically by the provider and there is also a voluntary excess that you can amend when you take out the insurance.
For example, if you claimed £700 to fix a leak and had a £200 excess then you would get £500 back.
You can set the amount of excess you would like to pay when shopping around for home insurance quotes.
The higher the figure, the lower the actual cost of your insurance – known as the premium – will be.
So it may be worth setting a slightly higher excess that you can afford to reduce the cost of your home insurance.
Does my credit score affect my home insurance?
Insurers will do a soft search of your credit report to confirm who you are and your address.
This won't show up on your report as its not a full search.
The only time an insurer will do a full search is if you are paying on a monthly basis.
This is because there are two ways to pay for your insurance.
You can either pay upfront or choose to make monthly payments with a bit of interest on top.
Paying monthly means you enter into a financial agreement, so the insurer will need to check your credit file first.
A lower score may make it harder to do this.
Additionally, if you miss insurance payments then you could fall into arrears and have a county court judgement taken out against you – which would also reduce your credit score.
Can I get home insurance during building works?
Home renovations can be exciting but knocking down walls, building extensions or removing windows and floors presents a new risk of damage to your home.
Check if your builder is covered for any damage they cause or you may need to take out additional specialist insurance to cover renovations.
Remember the insurance will only provide coverage for damage and not faulty or poor work so make sure you research your contractor first.
What type of door locks do I have?
Some companies will only insure you if you have British Standards Institute-approved locks on all outside doors and windows.
You might also receive a reduction for joining your local Neighbourhood Watch scheme and for installing some security lighting.
The more secure the lock the more secure your insurer will feel your property is, which could lower your premium.
A locksmith can tell you what type of locks you have or some may have an indent or label.
For example, a five lever mortice lock – one of the most secure types that needs a separate key to both lock and unlock – may have 5 levers engraved on it.
Which is the best home insurance?
The best home insurance will depend on your needs.
Cost is one factor, but buying the cheapest home insurance may not be the best strategy as you need to ensure it provides the right level of cover.
Also check an insurer's payout record and customer reviews.
Consumer watchdog Which? regularly ranks home insurers based on their customer service and policy coverage, while ratings website Defaqto also analyses providers based on their product features.
How can I get a cheaper home insurance quote?
It may be tempting to stick with the renewal quote that your current provider offers, but homeowners can typically save hundreds of pounds by switching at the end of a deal.
As home insurance depends on lots of factors that are unique to you and your property, the best way to shop around for the best deals is to use a comparison site and see what deals you can get.
Always make sure that you're happy and clear about the level of cover you'll be getting when making home insurance comparisons. It's not just as easy as going for the cheap home insurance.
Some big insurers such as Direct Line and Aviva don't have their deals on comparison sites, so make sure you check them to see what they can offer.
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