Depending on your policy, home insurance can cover the cost of repairing your home or replacing your belongings if they’re damaged or stolen. But how much home insurance do you really need and is it something you need by law? Here, we go through what to consider so you can decide what’s right for you.
Home insurance typically includes two types of insurance product:
The specific events you’re covered for will vary depending on the insurer but on the whole, you can expect a buildings and contents insurance to cover loss or damage caused by:
You can buy buildings and contents insurance as a combined home insurance policy, or you can buy them separately (either from the same or different insurers). Broadly speaking, you’ll usually get a better deal if you buy a combined policy from one insurer but it’s worth comparing what’s on offer before making a decision.
Most insurers will give you the choice of adding extra features onto your policy for a small cost. It’s entirely up to you whether or not to add them but some features can be handy, for example:
For buildings insurance, the amount of cover you need (the ‘sum insured’) needs to be enough to cover the cost of rebuilding your home if it were completely destroyed. Crucially, the cost to rebuild isn’t the same as the market value of your home.
If you had a survey done on your home when you bought it, the report should give you its rebuild cost. If not, you can use the free buildings cost calculator from the Building Cost Information Service and the Association of British Insurers (ABI).
Another way to work out rebuilding costs is to simply speak to your insurer, who will use what’s called the ‘bedroom-rated’ method. Insurers will use their own formula to calculate how much you might need based on the number of bedrooms in your home. This method will usually provide more than enough cover to rebuild your home, but the downside is that it can mean you’re over insured and could end up paying more than you need.
Just like buildings insurance, your contents policy should cover the cost of replacing all your belongings. Some websites offer contents calculators based on averages, but this might not capture everything you have, or it might be more than the value of your possessions (in which case, you’ll end up over insured).
To get an accurate figure, you should think about going from room to room, noting down all your furniture, and working out how much it would cost to buy each item again.
You should bear in mind something called the single item limit (or single article limit). This is a cap on the amount you can claim for any one item. The limit varies by insurer but is usually around the £1,500 mark. If you have any expensive items or antiques, check their value, as you may need separate insurance for those pieces.
Cost will depend on the policy you choose, the value of the cover you need and whether or not you add on any extras. Insurers will also consider where you live. So, if you live somewhere with a higher-than-average crime rate, you can expect to pay a little more compared to someone who doesn’t.
Insurers will also take into account whether you’ve made any recent claims (usually within the last five years). If you have, then this can also increase what you end up paying.
If you have a mortgage, your lender could insist that you have buildings insurance to protect the property. Some lenders might even make it a condition of the mortgage. If you own your home outright, you don’t need buildings insurance.
However, whether or not you have a mortgage, if you don’t have either buildings or contents cover, it’s up to you to cover all costs if your home and belongings are damaged or destroyed.
If you rent your home, your landlord is generally responsible for buildings insurance but it’s worth checking this in your tenancy agreement – just in case. If your landlord provides any items of furniture or electricals, then these should also be covered in your landlord’s own contents policy.
As a tenant, you should only have to insure your own belongings with your own contents insurance policy (if you want). This includes furniture and possessions you bring with you to the property. If something were to happen and your belongings were damaged, you would not be able to make a claim using your landlords insurance.
In most cases, insurers will have a clear claims process and there will often be a claims helpline that you can call. This information should be in your policy agreement so it’s worth checking and keeping any phone numbers somewhere handy.
If your home’s been burgled, you’ll usually need a crime reference number from the police.
Comparing quotes is one of the quickest and easiest ways to find great value home insurance. But don’t forget to check any terms and conditions before you sign on the dotted line.
Cheaper policies might look like a bargain, but they might not give you a level of cover you’re happy with and adding on extras will only increase the price. In contrast, pricier policies may already include a range of features, offering better value in the long run.
|Cost to repoint or repair brickwork||£405|
|Cost to remove a chimney breast||£800|
|Cheap variable rate mortgage||£1159.00 per month|
|Cheap tracker mortgage||£1303.00 per month|
|Cheap offset mortgage||£1088.00 per month|
|Cheap interest only mortgage||£1147.00 per month|
|Cheap fixed rate mortgage||£8.00 per month|
|Cheap capital repayment mortgage||£1256.00 per month|
|Cheap buy to let mortgage||£1271.00 per month|
|Cheap home insurance||£20.00 per month|
|Cheap contents insurance||£12.00 per month|
|Cheap building insurance||£10.00 per month|
|Cost to build a retaining wall||£320|