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What is home insurance?
Home insurance is, very simply, a way of protecting your home and its contents. It is insurance which will reimburse you if your home, or your possessions, are damaged or destroyed. You pay a monthly or annual premium for this protection.
What does home insurance cover?
Home insurance includes a number of different kinds of cover. Most importantly, it breaks down into buildings and contents insurance – the first insures the physical fabric of your home, while the second insures the contents – for instance furnishings, personal possessions, and white goods.
Buildings insurance will cover you against fire, theft, flood, subsidence, other natural disasters, and vandalism. Falling trees, lorries swiping your garden wall, gas explosions and burst pipes – they’re all covered.
Most insurance will help you pay for alternative accommodation if damage makes your home unsafe or uninhabitable.
Most home insurance will also cover your garden and any outbuildings or sheds. But that cover may be limited, so check the policy.
There are also various possible extensions of home insurance. Some insurers may include a number of them as standard, while other insurers may offer them as paid-for extras. Cheap house insurance doesn’t usually include them, while premium policies from large insurers usually do.
- Home Emergency cover helps you with situations like burst pipes and storm damage – the insurer will take charge, find and pay the tradespeople; you don’t have to do anything.
- Boiler cover will ensure a defective boiler is fixed or repaired.
- Personal possessions cover (‘all risks) covers your possessions even when you take them out of your home, eg your mobile phone.
- Liability insurance covers you against claims if people are injured in your home.
- Legal expenses cover protects you against the costs of legal action taken against you, or that you need to take to enforce your rights.
- Accidental damage cover can help protect your possessions against accidents caused by you, your family, or people you have invited into your home.
|Type of home insurance||Details|
|Garden coverage or sheds|
What does home insurance not cover?
Home insurance will not cover everything. It won’t cover you for:
- Natural wear and tear; things that wear out and have to be replaced are part of normal life, so you can’t insure against them.
- It also won’t cover you if the insurer finds that your negligence contributed to the loss for instance if you left the door open when you went to work, and a burglar took advantage.
There are also a number of exclusions that will be made in your policy. It’s up to you to check the policy and make sure you understand them before you sign up. These exclusions will probably include:
- Unoccupied property: Most insurers won’t insure you home if you leave it unoccupied for more than 30 days; some have a lower limit. (However, some insurers will exceptionally allow you to take a longer absence if you ask, for instance if you want to take a round-the-world cruise for an important anniversary.)
- If you let your property out or take a lodger, you could invalidate your insurance. You’ll need to talk to your insurer before you do this, and you could need to change your policy.
- Excess. The excess amount on a policy is the amount that you’ll have to pay yourself if you make a claim, before the insurer pays anything.
Do not mix unoccupied property insurance with holiday home insurance, left empty most of the year. Check out our guide on best holiday home insurances.
What types of home are covered by home insurance?
Home insurance can cover any type of building. However there is a small difference between flats and houses.
- Houses need their own buildings insurance, and can have contents insurance added to that.
- Flats will usually have their building insurance arranged for the entire block through the freeholder or commonhold. Each flat’s resident is then responsible for their own contents insurance.
Some kinds of home are more difficult than others to insure. You may need to talk to a specialist if you live in:
- a listed building,
- a building of non-typical construction (eg straw bale, thatched, prefab or Huf Haus),
- a live-work unit,
- a chalet or static caravan.
What home insurance extras are available?
Most policies offer a number of extras that you can select at additional cost. These might include:
|Home insurance extras available|
|Pet damage||Offered by a few insurers, to protect you against your furry friends’ over-enthusiasm.|
|Legal expenses||Can be quite broad and include dealing with employers or vendors.|
Most home insurance doesn’t include cover for accidental damage. If your kids manage to kick a football through a window, or you manage to spill paint on the carpet, you’re going to have to pay for it yourself. However, a lot of policies will allow you to add accidental damage for an additional premium.
Check out our other guides on home insurance extras.
Mobile phone cover
Mobile phone insurance is a policy that covers your phone in case of loss, theft or damage. Your mobile phone might be covered as part of your home insurance. Depending on the type of policy you may only be covered if it’s lost, damaged or stolen while you’re at home (sometimes also when you are away).
Bikes may be covered by your home insurance, though it’s likely you’ll need to specify them separately on your policy to get them covered, particularly if they cost more than £300 or so. Of course, this cover’s only useful if you have a personal possessions (all risks) contents policy that covers them outside the home.
Student contents cover
Student Contents can be covered by Home insurance although it can also be a standalone insurance policy. Student contents insurance is specifically put in place to protects your possessions like furniture, clothing, laptops and tablets – from risks, including theft, fire and floods, as a student in the case that you are either living in a rented apartment or student hall.
Who is home insurance for?
If you have a home, home insurance is for you!
- If you own your own house, you’ll need buildings insurance – in fact if you have a mortgage your lender will probably insist on it. You’ll also want your house insurance to cover the contents of your home.
- If you rent, or you live in a flat, you’ll need contents insurance so all your own stuff is covered.
- If you own a property and rent it out, you’ll need buildings insurance, but you may also want contents insurance to cover white goods and furnishings that go with the property.
If you rent, you may think you don’t own much and so you don’t need insurance cover. But take a look at what you’ve actually got – a fridge, washing machine, carpets, curtains, your furniture, paintings on the wall, books, CDs, a laptop, tablet, sports gear – it soon adds up. Very few people have so few possessions that they don’t need any insurance at all – even Marie Kondo probably hasn’t decluttered to that extent!
Tenants’ insurance – technically, home contents insurance for tenants – covers theft of, or damage to, your own possessions while you’re renting a home.
How much is home insurance?
To know how much is home insurance, we will study:
- Average cost of home insurance
- Factors that are affecting the price
- The cover you need
Average cost of home insurance
There are various figures available and they don’t all tell the same story.
The AA insurance index put the average combined building and contents insurance in the UK at about £160, but The Association of British Insurers says the average is about £300 a year. It’s a big difference – the AA used the five cheapest quotes available while the ABI uses premiums actually written by members of the association. So you can see some people are paying a lot more than cheapest quote!
ABI figures also split out the cost of separate buildings and contents insurance at
|Average annual premium|
You can see that buying a combined policy at £300 is a bargain compared to paying a potential £390 for separate policies.
Factors affecting the price
However, your quote could be more or less than the average. It will reflect various factors:
- your location – if you’re in a high crime risk area, or an area affected by subsidence, or if you’re close to a river which could flood, your premiums could be higher;
- the size of your home;
- the value of its contents;
- the type of construction – flat roofs and atypical construction types can be more expensive to insure;
- security features – if you have a burglar alarm, smoke detectors, and good locks fitted you’ll get a lower premium;
- your claims history – whether you’ve claimed on your home insurance in the last five years;
- occupation – if you’re at home most of the time, your premiums will be lower than for someone who’s often away;
- the amount of excess you take on – the amount you’re prepared to pay out of your own pocket before you can claim; and
- the type of cover you apply for – ‘bare bones’ or a premium policy with accidental damage and other extended protections.
How much home insurance cover do you need?
You need cover that’s just right – not too much, and not too little. If you over-insure, you’re paying too much – but if you under-insure, your insurer could cut any payout if you claim.
- For your building, you need to cover its rebuild cost, not the market value.
- For contents, it’s best to do an inventory of your house and work out the replacement (new-for-old) value of your belongings.
To find the rebuild cost of your home, your best approach is to use a rebuild cost calculator. Unless your home is atypical – if for instance you live in an earthship or a thatched cottage – it will produce a rebuild cost you can rely on. There are only so many ways to rebuild a two-up, two-down city terrace or a suburban semi.
For contents, check each room of your property, including all those little places you forget – the cupboard under the stairs, the shed, the spare room. Remember that anything that’s not fixed to the building is included under ‘contents’ even if it’s plumbed in – a fitted kitchen will come under buildings insurance, but free-standing fridges, microwaves, and washing machines are considered to be ‘contents’. Again, there’s a tool that can help you with this.
You also need to consider any particularly valuable items and assess their value. That’s because many insurers have a limit on the amount they’ll pay for any single item, or for valuables – so if you have a small collection of modern art, or some heirloom jewellery, or even just a lot of consumer electronics because you’re a big videogames fan, take a note of how much these things are worth.
How do I get home insurance quotes?
The best way to compare home insurance is online. You can see many more quotes at a time instead of having to spend time ringing round different insurers.
Here, you can get home insurance quotes in just seconds, whether you’re looking for house and contents insurance or just buildings insurance or contents insurance separately.
How do I save money on my home insurance?
First of all, remember to shop around. Do a proper home insurance comparison to find the best home insurance that gives you all the cover you need.
Many people auto-renew their home and contents insurance every year. They’re losing out, because often, the insurance company will put their premiums up every year. By shopping around and picking a more competitive home insurance quote, they could save a large amount of money. Citizens Advice reckons that if you stick with the same insurer for five years, you could end up paying double the premium you’d get if you had switched.
But there are other ways to save money too.
- Check your locks. Getting five-lever mortise deadlocks with BS 3621 certification for all your external doors, and fitting window locks, can pay for itself in cheaper home insurance.
- Get a burglar alarm. Particularly if you have high value contents, this can significantly reduce your premiums.
- Get a combined policy. Buying your house contents insurance together with your building insurance is cheaper than buying the two policies separately.
- Take a voluntary excess – a higher excess than the normal compulsory excess on your policy. If you’re prepared to pay say £500 rather £100 of any claim out of your own pocket, the insurer will reduce your premiums.
- Pay annually, not monthly. If you pay monthly, the insurer will usually charge you more, to take account of the fact they’re effectively lending you part of your premium. (If you have a 0% credit card, you could use this to pay your premium.)
- Remember to insure the rebuild cost of your house and not its market value, or you could be paying for 30% or more extra cover that you don’t need.
- Only pay for extra cover if you really need it. For instance, accidental damage can bump up the cost of your premiums significantly. It can be well worth it if you have a big family and lots going on at home – but if you’re a singleton with a small flat you could possibly skip it.
How can I claim on my home insurance?
To claim on your home insurance you need to contact your insurer. Your policy documents will tell you how – that may be on a dedicated phone line, or through an online portal.
You probably want to take some photos of the damage. In fact, it’s not a bad idea to have up to date photos of your home so you can show the insurer ‘before’ as well as ‘after’. And before you ring your insurer, take the time to note the date, exact time and circumstances of the damage.
Unless it’s an emergency, it’s important you don’t get repair work done or buy new stuff before you’ve spoken to your insurer. (In an emergency, they will understand you need to repair broken doors or windows, for instance, but if you have a burst pipe, don’t start ordering new carpet!)
If theft or vandalism is involved, you’ll need to contact the police, too, and get a Crime Reference Number to give to your insurer.
To check how to claim on your home insurance, check our reviews.
How can I cancel my home insurance?
When you get home insurance, you’re given a 14 day cooling off period during which you can cancel without penalty. You’ll need to put this in writing and enclose your documents – but it’s always worth phoning or emailing in advance.
If you need to cancel after the cooling-off period, for instance if you’re moving house, you’ll need to talk to your insurer. You may have to pay a penalty. If there are complete months left on an annual paid policy, you may get a refund.
If you’re paying monthly, don’t cancel your direct debit. Your insurer may need to take a final payment to balance the books.
Some insurers will refund your cancellation fee if you switch insurer. Check the cancellation and switching fees charged by each insurer in our reviews.
Does home insurance cover me if I’m away from home?
Obviously you’re allowed to take a holiday! But most insurers aren’t prepared to run the risk of insuring a property that is left empty for a long while.
Usually, they’ll limit your absences to 30 days at a time, and they may have an annual limit too.
If you’re going to be away for a while – for instance on a work secondment – you need to ring your insurer. Some insurers will make one-off exceptions if they know why you’re going to be away, or they may add unoccupied cover at an extra charge. Otherwise, you’ll need special unoccupied house insurance. Remember, when you come back, you need to change your insurance back again.