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Buildings and contents insurance

You may find that you only need buildings insurance or contents insurance for your home, so it’s important to do your research before investing in them both.

This guide will explain the key differences between buildings insurance and contents insurance, how to compare home insurance quotes, and what factors you may need to consider before doing so.

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What is buildings insurance?

Buildings insurance will provide you with the money to cover the costs of repairing or rebuilding your home should it be damaged or destroyed.

If you are a landlord or a home owner then buildings insurance will be crucial, but if you are renting a property then buildings insurance is the responsibility of your landlord. However, as a tenant, you may wish to consider taking out contents insurance.

Buildings insurance will cover the structure of your home – but can also include sheds, garages and other external features.

These features aren’t always included as standard, so make sure you check with your insurer in case you need extra cover.

A standard policy will usually cover you for the following:

  • Floods
  • Subsidence
  • Theft/vandalism
  • Fire
  • Lightning damage
  • Water damage

It’s important to remember that when you’re taking out buildings insurance – you need to cover your home for its rebuild value, not the market value if you were to sell it. Find out how to calculate how much home insurance you need and compare building insurance.

What is contents insurance?

Contents insurance will cover the cost of the possessions in your home should they be damaged or destroyed. A contents insurance policy will generally offer protection against the same perils as buildings insurance.

The most important thing you need to consider when calculating how much contents insurance you need is how much the contents of your home are actually worth. It’s likely that your contents are worth more than you think – you should go through every room in your house and note each item and its worth at today’s prices. The figure will usually come to well over £30,000 on average.

buildings and contents insurance

Make sure you inform your insurer of any home improvements being made, otherwise you could invalidate the next claim you make

It is vital that you don’t assume all your possessions are covered within your contents insurance policy; some providers insist that high value items (for example items over £1000) must be insured separately from your main contents policy.
There are two different types of contents insurance:

  • ‘New-for-old’ policies
  • ‘Wear and tear’ policies

New-for-old policies will provide the full cost of repairing damaged items or replacing destroyed items. Wear-and-tear policies will repair damaged items but with a reduction for depreciation and are generally cheaper as the claims will usually be smaller.

Before you compare buildings and contents insurance

For a full guide on how to make your building and contents insurance cheaper, follow our seven steps to cheaper home insurance.

However, there are some quick ways to save on your contents insurance before you start to compare buildings and contents insurance:

  • Fitting a burglar alarm, joining local Neighbourhood Watch schemes, security lighting and other measures to secure your home
  • Fitting a NACOSS alarm could earn you a discount of up to 7.5%
  • Install a smoke alarm
  • Increase the excess on your policy – if you are happy to cover more of the cost of the claim your premiums will be lowered
  • No claims discounts – the less you claim, the lower your premiums will be. Some companies offer a no claims discount, but check with them before you buy cover.
  • Shop around and compare buildings and contents insurance quotes online. At uSwitch you can check the prices on hundreds of policies and you’re guaranteed to save at least 10% on your renewal quote on a like-for-like basis.

Do I have to take out buildings and contents insurance?

Unlike car insurance, you are not breaking the law if you don’t have building and contents insurance.

However, most mortgage providers will insist that you have buildings insurance before they will lend you any money, as your home is used as collateral in the event that you can’t keep up repayments.

Beware of mortgage providers selling you expensive insurance policies alongside your mortgage – compare buildings and contents insurance and get a cheaper quote elsewhere if you can, but you’ll need to weigh up the cost of any exit fee, if applicable, versus the money you’ll save.

Can I get home insurance if I have a lodger?

Unfortunately, we can’t provide you with a home insurance quote if you have a lodger or rent out a room in your home – this is because our panel of insurers only cover people whose home is occupied solely by them and their family members.

However, this doesn’t mean that you cannot find home insurance elsewhere – many companies do provide cover for people with lodgers.

If you already have home insurance and want to take in a lodger, make sure you inform your insurance company – not disclosing this information could invalidate your contents and buildings insurance policy.

Circumstances that could invalidate your home insurance policy

There are a number of other changes to your home situation that could invalidate your contents and buildings insurance policy.

For instance, if you make significant structural home improvements such as knocking down a wall, installing a loft conversion or putting an extension on the house, this could change the terms of your policy.

Not informing your insurer will cause problems for you should you need to make a claim later.

Similarly, you may need to inform your insurer if you live within very close proximity to a tall tree or flood-prone area, or have parts of your home made from non-standard materials. For a full guide to non-standard home insurance claims, continue reading here.

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*Based on 49,607 customer quotes using the Quotezone’s (uSwitch’s home insurance partner) comparison service between Oct-Dec 2013. The cheapest quote was subtracted from the median (halfway point) quote returned to each customer to produce a ‘representative’ saving. At least 50% achieved a representative saving of £72.00 or more. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.
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