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How much home insurance do I need?

Not sure how much home insurance you need? Here we explain how to work out what to include in both buildings insurance and contents insurance.

Buildings and contents insurance – how much is enough?

Home insurance certainly isn’t the most exciting thing on anyone’s to-do list. But when you consider your home is probably your biggest asset and contains almost all of your worldly possessions, taking out home insurance to protect it against minor mishaps and major calamities, suddenly sounds less tedious.

Working out how much home insurance you need is crucial. Get your sums wrong and you risk not having enough money to rebuild your home or replace your things if disaster struck. Over-estimate your cover and you could end up paying more than you need to.

In this article, we explain what home insurance is and give some helpful tips on how to calculate the amount of cover you need to be confident your home is properly protected.

Terraced houses on a UK street

What is home insurance?

Home insurance is actually two different types of cover under one collective roof (pardon the pun) – buildings insurance and contents insurance. These can be taken out individually or combined.

If you want both, as most homeowners do, taking out combined cover with one insurer can make life easier, particularly in the event of a claim, as you’ll only ever have one company to deal with and the price generally works out more reasonable than separate policies.

What is buildings insurance?

Buildings insurance takes care of the structure of your property – the bricks and mortar. The purpose of this insurance is to cover the cost of rebuilding your house if it was destroyed by a major event like a fire or natural disaster such as a flood.

If you own your house, particularly if it’s a freehold property, then your mortgage lender will usually insist on buildings cover as a condition of the loan. And even if your mortgage is paid off, could you afford to rebuild your home from the ground up if you didn’t have buildings insurance?

Workman building an exterior wall

How much buildings insurance do you need?

The simple answer is enough to cover the cost of labour and materials etc, to rebuild your home from scratch, referred to as the ‘rebuild cost’.

This isn’t just the cost of four walls and a roof, it includes any outbuildings like the garage or garden shed and built-in fixtures such as kitchen units, bathroom suites and even fitted wardrobes.

Kitchen interior

What the rebuild cost doesn’t include is the land your property sits on, because you wouldn’t have to buy that again. And how much you paid for your home or how much it might be worth are irrelevant. You’re only insuring the fabric of all the structures that make up your home, so the rebuild cost is usually much less than your home’s market value.

You may know what it could cost to rebuild your home, but if you do need to calculate the rebuild cost don’t be tempted to pluck a figure out of the air, as it could cost you dearly if you get it wrong. Try any one of these sources to get hold of an accurate estimate:

  • The Association of British Insurers’ (ABI) rebuilding your house cost calculator developed by the Royal Institute of Chartered Surveyors (RICS)
  • Your mortgage valuation report if you bought your property in the last 2 years
  • Your current buildings insurance schedule
  • Your mortgage provider

What is contents insurance?

Home contents cover isn’t mandatory but think about the cost of replacing your stuff after a burglary or a fire and the significant benefit of having it is clear.

Contents insurance basically covers everything in your home that isn’t a permanent fixture – like furniture, soft furnishings, clothes, gadgets, white goods and valuables – if they’re damaged, stolen or lost. The cover amount varies for different categories of items.

You can usually increase your cover to include specific items of value and items outside of the home. Also, some providers offer optional extras like home emergency assistance, legal help and key cover for added reassurance if you want it.

Back of a man in a room in chaos after a burglary

How much contents insurance do you need?

The simple answer is, probably more than you think. It’s all too easy to underestimate the value of your home’s contents because there are so many things that need to be included, not all of which are immediately obvious.

TVs and valuables like laptops and jewellery tend to spring easily to mind but don’t forget furniture and electrical items as well as carpets, curtains, clothes and even the food in the freezer.

And remember, most home insurance providers replace items on a ‘new for old’ basis. So, even if your second hand 3-piece suite has seen better days, think what it would cost brand new but do bear in mind that a deduction could be made for wear and tear to specific items such as clothes and linen.

5 tips for calculating your contents insurance need

  • Go room by room making a list of everything as you go. It’s also a good idea to take photos of your possessions so you have a record
  • List valuable items separately in case you want to specify higher value items on your policy
  • Go outside too because garden furniture, tools and bikes etc. should all be covered
  • Check the cost of things online to get an idea of the ‘new’ price to replace your possessions
  • Ask a specialist to value antiques or unusual items to make sure you don’t underestimate their value
Checklist for listing home contents

Home insurance for over 50s

Being over 50 can have its advantages when it comes to buying insurance. However, if you’ve only recently joined the club, you may feel special ‘older people’ deals don’t apply to you. But why not make the most of your ‘low risk’ status? After all, a deal’s a deal and there are good discounts available on home insurance from companies like SunLife that focus on the over 50s.

Here's the information that you need to know about who we are and the other companies that we work with in order to provide our products and services.

Who are SunLife?

Phoenix Life Limited trades as SunLife and is the provider of the Guaranteed Over 50 Plan, SunLife Insurance and the life insurance policy payment option for Funeral Plans. Phoenix Life Limited’s registered office is at 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 1016269). Dignity Funerals is not authorised or regulated for this activity by either the Financial Conduct Authority or the Prudential Regulation Authority. Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

SunLife Limited distributes financial products and services and is a company limited by shares, registered office: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 05460862). SunLife Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (registration no. 769427).

You can contact us by post at SunLife, PO Box 1395, Peterborough, PE2 2TR or by phone on 0800 008 6060.

If you choose to add Funeral Benefit Option to your Guaranteed Over 50 Plan the funeral services are arranged and provided by Dignity Funerals Limited. Dignity Funerals Limited is a company registered in England and Wales No. 00041598. VAT registered No. 486 6081 14. 4 King Edwards Court, King Edwards Square, Sutton Coldfield, West Midlands, B73 6AP. Telephone No. 0121 354 1557. Fax No. 0121 355 808. Part of Dignity plc. A British Company. Dignity is not authorised or regulated for this activity by the Financial Conduct Authority or the Prudential Regulation Authority but is a member of the National Association of Funeral Directors.

Who provides the Funeral Plans?

Dignity Funerals Ltd arranges and provides the funeral services. Dignity Funerals is not authorised or regulated for this activity by either the Financial Conduct Authority or the Prudential Regulation Authority. Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

The life insurance policy that pays for your funeral will be provided by Phoenix Life Limited, trading as SunLife.

Who provides My Smarter (ISA)?

My Smarter (ISA) is provided by Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority. Details can be found on the Financial Services register, registration No. 188832. Member of The Investment Association. Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ.

Who provides the Will writing services?

Hugh James is authorised and regulated by the Solicitors Regulation Authority (SRA Number:303202).

The information contained on this website is based on Hugh James' understanding of the law of intestacy in England and Wales only as at April 2014. The law in Scotland and Northern Ireland is significantly different. This is for information purposes and is not intended to be legal advice.

Who provides Family Life Insurance?

SunLife Family Life Insurance is provided by Scottish Friendly Assurance Society Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Details can be found on the Financial Services register (registration number 110002). Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ. 

Who provides SunLife Pet Insurance

SunLife Pet Insurance is arranged and administered by BDML Connect Limited. BDML Connect Limited is authorised and regulated by the Financial Conduct Authority (No. 309140). Registered in England and Wales Number 02785540. Registered Office: 45 Westerham Road, Bessels Green, Sevenoaks, Kent, TN13 2QB.

Who provides SunLife Home Insurance

SunLife Home Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.

Who provides SunLife Car Insurance

SunLife Car Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.