Wondering whether you need buildings and contents insurance? We explain what the two types of policies cover and why you might need them.
Types of home insurance explained
Your home is important to you. It’s a haven, the centre of the family and the place we want to get back to at the end of the day. It’s also chock-a-block with all that’s special to you; all the memories you’ve collected over the years and saved hard to buy. So surely that's worth protecting with buildings and contents insurance? Or home insurance as it’s more commonly known.
The thing is you may wonder why you need it – and may even begrudge paying for it. Until that is, something goes wrong and you thank your lucky stars you had the foresight to cover yourself.
Here we make sense of the two quite different types of insurance that together make up home insurance, to help you understand the cover you need.
What are the different types of home insurance?
This covers the cost of repairing the actual structure of your home. That includes your walls, windows and roof, as well as all the permanent fittings in your home like baths, toilets and fitted kitchens.
This covers all the personal possessions in your home in case they're damaged or stolen. That includes your furniture, TVs, personal belongings and even some types of flooring, including carpets.
Although you can insure your building and contents separately, homeowners often choose to buy their buildings and contents insurance together. It keeps everything simple and can also help to keep the cost down.
Who needs buildings insurance?
If you own your home or any other property, it's essential to protect such a valuable asset in case disaster strikes. Just imagine if it was completely destroyed through fire, flood or an explosion – it would have to rebuilt from the ground up.
Most mortgage providers will insist that you have buildings insurance in place before they'll give you a mortgage. That way, if the worst should happen, they'd be able to recover their losses.
If, on the other hand, you rent your home, then buildings insurance will be the responsibility of your landlord.
Who needs contents insurance?
Whether you own a property or rent one, it's sensible to cover all your personal possessions – that's your furniture, carpets, curtains, electrical items, clothes and jewellery – literally everything that's not screwed down! If you rent a furnished property, your landlord should already have cover in place for the furniture that's there, but you'll still need to cover your own possessions.
Unlike buildings insurance, it's up to you whether you take out contents insurance. However, if you were burgled or had everything destroyed as a result of fire or flood, could you afford to replace everything?
What does buildings insurance cover?
Buildings insurance covers the cost of either repairing or rebuilding your home if it's damaged. Some policies also cover you for damage to outbuildings, garden walls and driveways – but not all, so it's worth checking.
Although insurance policies vary, generally you'll be able to make a claim if your property is damaged by:
- Manmade causes like theft or vandalism
- Natural events like storms, fire or floods
- Falling trees
- Car and lorry collisions
- Water or oil leaking from pipes or the heating system
- Subsidence (where the ground shrinks under your building)
- Heave (where the ground expands under your building)
- Subsidence (when the ground shrinks under your building)
What does contents insurance cover?
If you could pick up your home and give it a good shake, your contents are all the things that would fall out – so anything not physically attached to the building. Contents insurance covers you if any of these possessions are lost, damaged or stolen.
This generally includes:
- Electrical goods
- Cash within your home (normally up to a specified limit e.g. £500)
What isn’t covered?
As well as knowing what your home insurance policy does cover, it's also important to know about any exclusions (things that aren’t covered).
Common buildings insurance exclusions
You won’t be covered for general wear and tear on your property, so don't expect your insurance to pay out for a roof that's reached the end of its life. Most insurance policies also won't cover you for damage caused by:
- Leaking gutters
- Some pests (for example, insects and birds)
- Frost (unless it causes damage from a burst pipe)
- Gates or fences damaged in storms
You also might not be covered if your home is left empty for more than 30 days – although if you let your insurer know in advance, they may be able to extend this.
Common contents insurance exclusions
There are several things that contents insurance won't cover and, like buildings insurance, general wear and tear doesn't count. You won’t usually be covered for:
- The structure of your home, such as the walls and the roof
- Accidental damage unless this is specified in your policy
- If you lose or have an item stolen a certain distance away from your property
- There is willful damage
- Damage that has been caused by bad DIY
- Damage that is done to expensive art or antiques – usually such expensive items will be excluded unless they're covered as an additional extra
If you have valuables, the amount you can claim for these is normally restricted to a single item limit (normally £1,500) and to a total amount. If your valuables exceed the upper limit, it’s worthwhile paying more to increase your cover.
How much does buildings and contents insurance cost?
The cost of buildings insurance is partly based on the rebuild value of the property and whether you live in an area at risk of flooding.
Your contents insurance quote factors in how much cover you need to protect all of your possessions, the crime stats for your postcode, your claims history and any optional extras you add on to your policy, such as accidental damage cover.
It’s important to have enough cover to adequately protect your property. It’s also important to make sure you’re not paying for cover you don’t actually need. Our article How much home insurance do I need? can help you work out what’s right for you.
And remember, if you own your property, combining your buildings and contents cover with the same insurer could get you a better deal and make life easier for you if you needed to claim.