Buildings and Contents Insurance: How Can You Insure Your Home?

May 5, 2011
Carol Finch

What Kind of UK Home Insurance Cover do You Need? - Image by svilen001

Homeowners have to take responsibility for insuring their own properties. This usually involves buying policies that cover the building and its contents.

UK homeowners, whether first-time buyers or existing mortgage holders, need to consider which insurance will best protect their interests. Most people use joint or single policies designed to cover both their home and their possessions. How do these plans work and are they essential?

What is Buildings Insurance?

This kind of cover is designed to insure the property itself and its permanent fixtures. It protects against both small and large issues from accidental damage through to the complete destruction of your home and usually includes factors such as fire, theft, flood, subsidence and accidents. It's worth noting that the sum you insure your building for is based on its rebuild cost and not on its higher market value.

What is Contents Insurance?

Insuring your building only covers the actual structure or shell of the property. Contents cover is used to protect your possessions, once again from issues such as fire, theft, flooding and damage. This can include your furniture, fixtures and fittings, clothes, electrical equipment and all the other stuff you have in the home.

Do You Have to Buy Home Insurance?

If you have a mortgage then your building society or bank is likely to insist that you agree to put buildings cover in place before they approve your application. They will not particularly care whether you buy contents insurance as their primary concern is the property itself.

Bear in mind that you do not have to buy policies from your mortgage provider and it may actually be cheaper to shop around elsewhere. If you rent your home then buildings cover should be the responsibility of your landlord and all you need to think about is insuring your own possessions.

Should You Buy a Joint Policy or Separate Ones?

You can buy both buildings and contents cover in a single joint policy; or, if you prefer, you can buy individual plans from different insurers. Generally, you'll save money by bundling insurance with one company as most will discount premium costs for dual coverage.

Why is it Important to Compare Home Insurance Policies?

Although you can choose from different benefits and amounts of insurance when you buy policies, all coverage is based on the same elements. So, for example, if you look at two separate insurance companies selling exactly the same plans with exactly the same features and insured sums, then you may only really spot one difference: premium costs.

Pricing is not standardised and, therefore, if you shop around and compare costs (an insurance comparison supermarket can be useful here), then you could save some money whilst getting the protection you need. Looking at insurance discounts and ways to cut premium costs may also be useful. Bear in mind, however, that the cheapest policy will not always give you the best coverage and it is important to work out what you need before you look at costing it up.

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