Whether you’re a first-time buyer or an existing homeowner, home insurance is one of the main things to consider when moving into a new property. This guide explores the different types of home insurance and their pros and cons.
Key Takeaways
Types of Home Insurance: There are two main types - buildings insurance (covers the structure and permanent fixtures) and contents insurance (covers personal possessions).
Top Tips for Choosing Insurance:
- Understand what your policy covers.
- Accurately value your possessions.
- Ensure adequate buildings cover.
- Be honest about any risk factors like floodplains.
- Check if you can afford the excess fee.
Do I need home insurance?
While not mandatory, home insurance is highly recommended. It covers you in the event of damage to your property and belongings. This could happen because of:
• Fire, floods and storms
• Vandalism
• Frozen or burst pipes
• Subsidence and heave
• Fallen trees or lampposts
What types of home insurance are there?
There are two main types of home insurance: buildings and contents insurance. They can be bought together or separately.
• Buildings insurance. This covers structural damage to your property, including the roof, walls and floors. It also covers damage to permanent fixtures and fittings like kitchen units. It's not mandatory, but your mortgage lender usually requires it.
• Contents insurance. This protects you from loss or damage to personal possessions in the event of a fire, theft, flooding or similar. It's entirely optional.
What are the pros and cons of home insurance?
Below are some pros and cons of home insurance.
| Pros | Cons |
| It covers significant damage to your home and possessions. |
It doesn't cover everything. |
| It protects you from lawsuits. |
It represents an extra cost. |
| Its conditions are subject to change. |
Do I need both buildings and contents insurance?
You're not legally required to get home insurance. However, your mortgage lender will want you to have buildings insurance if you are a homeowner or a landlord.
You won't need buildings insurance if you're a tenant, own a leasehold, or only have a share of the freehold. This is because the freehold's owner will have already insured your home. You may want to get contents insurance to protect your belongings.
How can I reduce the cost of home insurance?
To reduce the cost of your home insurance, you can:
1. Improve your home security
2. Increase your excess*
3. Pay annually
4. Compare quotes
*An excess is the amount you pay towards the overall cost of an insurance claim.
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