Depending on your living circumstances you may find that you only need buildings insurance cover or contents insurance cover for your home, so it’s important to do your research before investing in them both.
This uSwitch guide to building insurance and contents insurance will explain the key differences between the different insurance policies. We also explain how to compare home insurance quotes, and what factors you may need to consider before comparing the different home insurances.
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What does buildings insurance cover?
A Buildings insurance policy 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 homeowner 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:
- 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 does contents insurance cover?
Contents insurance policy will cover you for the cost of the possessions in your home should they be damaged or destroyed. Contents insurance will generally offer protection against the same perils as buildings insurance cover.
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.
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 could 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.
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.
What does house/home insurance cover?
Home insurance combined policies are generally both building and contents cover with the same policy and will cover damage to your home and contents caused by such perils as flooding, fire, windstorms, hail, lightning, theft or vandalism.
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.