When you buy or renew your home insurance policy, base your decision on the cover provided, not just the price. The cheapest policy might not be right for you if it has a high excess or doesn't cover what you want, for example.
Buildings insurance covers damage to the structure of your home, such as the walls, windows, and any permanent fixtures such as a toilet or fitted kitchen. If you own your home, you’ll need buildings insurance. It’s usually a condition of your mortgage, but you should have protection even if you own your home outright. If it’s a leasehold flat, the buildings may be insured by the landlord who owns the freehold. Check your lease to find out who’s responsible.
You need to insure yourself for the amount it would cost to completely rebuild your home. This is usually less than the sale price of your home. You can find advice about working out the cost of rebuilding your home on the Association of British Insurers website, or by using a rebuilding cost calculator.
Contents insurance covers your belongings in case of theft, or damage caused by fire or flooding. Buildings and contents insurance are often sold together, but unlike buildings insurance, you do not need contents insurance to buy a house. If you’re renting, you don’t need buildings cover but you should consider taking out contents insurance for your peace of mind.
You may be able to reduce your home insurance premiums if you have good security, such as alarms or good quality locks, or if you’re in a Neighbourhood Watch scheme. Some companies offer cheaper policies for older people, who may be considered lower risk.
When you take out a policy, be honest about the security that you have and how you use it. If your home is broken into and you weren’t using the measures you said you had, your insurer may reject all or part of your claim. Check the small print or phone your insurance company to find out what level of security your policy requires.
Make sure you understand what the policy covers. For example, does it offer new for old to cover the cost of replacing items? Are there limits to the amount you can claim? MoneyHelper has a guide to what a good contents insurance policy looks like.
When buying home insurance, compare levels of cover and check the exclusions. The following may not be included as standard:
- personal belongings cover – insurance for things you own that you take outside the home, such as jewellery or a laptop
- comprehensive accidental cover – cover for damage you cause by accident
- home emergency cover.
MoneyHelper has more information on getting a good deal.