Home Insurance

What is home insurance?

Home insurance helps cover the cost of replacing or repairing your property or belongings if they're damaged, destroyed or stolen. The two main types are buildings insurance and contents insurance.

Buildings insurance covers the physical building structure and permanent fixtures and fittings, such as baths and built-in kitchen units. It can also cover what’s outside, such as decking, sheds and fences on your property.

Contents insurance is for your belongings, including clothes, furniture and electricals, and covers the cost of replacing or repairing them. Generally, it’s all the things you would take with you if you moved, but it also includes curtains and carpets. Some policies also include cover for the contents of your freezer and lost keys.

How much is home insurance?

The average premiums for home insurance in the UK between April and June 2022 were, according to the Association of British Insurers (ABI):

• combined buildings and contents insurance: £299
• buildings insurance: £228
• contents insurance: £116

But this is just an average and what you pay depends on a few factors, including the type of cover you’re looking to buy, how much you need, your claims history and where you live.

Since January 2022, new rules brought in by the Financial Conduct Authority (FCA) ended the loyalty penalty for home and car insurance, where insurers offered the most competitive deals to new customers. So when you renew your home or car insurance policy, you can’t be charged more just for being an existing customer. But this only means you can’t be penalised for not being a new customer, and your insurance premium could still go up for other reasons.

You can still shop around for a better deal and, thanks to the new rules, cancelling the automatic renewal of your current policy should now be less of a headache.

Who needs home insurance?

There is no law that says you must have home insurance. But that doesn't mean you shouldn’t consider it. If you’re a homeowner, most mortgage providers ask you to have buildings insurance in place. That is so they know the cost of making repairs or rebuilding your home after damage would be covered.

You don’t have to get the buildings insurance a mortgage provider offers you, unless it’s a condition of the agreement – though the lender may check that the cover you take out is enough.

If you’re a landlord, standard home insurance policies may not provide the cover required for a buy-to-let. Landlord home insurance offers protection for issues such as loss of rental income if your property is uninhabitable and disputes with tenants.

If you’re renting a property, it’s the landlord's responsibility to arrange buildings insurance, or the freeholder if it’s a leasehold property. But you'll need to take out your own renters contents insurance if you want to cover your belongings for damage or theft.

Like buildings insurance, contents insurance isn’t compulsory, but without it you would need to foot the bill for repairing or replacing your belongings if they were destroyed or stolen. This includes clothes, jewellery, furniture, kitchen items and electricals.

What does home insurance cover?

Generally, buildings insurance helps cover the cost of repairing damage to your home or completely rebuilding it, if it’s destroyed. Contents insurance helps cover the cost of repairing or replacing damaged or stolen belongings.

What is usually covered with home insurance?

Most buildings and contents insurance policies will cover damage caused by:

• flooding and storms
• fire and explosions
• burst, frozen or leaking pipes
• water damage
• subsidence
• theft and vandalism
• fallen trees, lampposts, aerials and satellite dishes
• vehicle or aircraft collision

If you need emergency temporary accommodation such as after a flood, your home insurance will usually cover the cost – but check the small print.

Buildings and contents insurance policies usually also offer personal liability cover, up to certain limits. This is for if a visitor is injured or their property is damaged in your home, or if you or someone in your household accidentally damages someone else’s property. This isn’t the same as legal services cover, which is usually an add-on to a home insurance policy.

Other optional extras for contents and buildings insurance include home emergency cover to fix emergency issues, and personal possessions cover for when you take your belongings outside your home.

What’s not usually covered by home insurance?

Policies vary, but standard home insurance doesn’t usually cover:

• Wear and tear or gradual damage, as it’s designed for unexpected, sudden events.
• Electricals that have come to the end of their useful life.
• Damage after lack of maintenance or poor handiwork.
• Accidental damage, such as dropping your TV or a crack in your bath after knocking something off a shelf. Comprehensive accidental damage cover is usually an add-on, which costs extra.
• If you make a claim for a home that was unoccupied for more than 30 days in a row, unless you’ve let your insurer know beforehand and they adjusted your cover.
• Damage caused by pets, such as chewed table legs, scratched table tops and nibbled wiring. Even if you take out accidental damage cover as an add-on, you’ll likely need an extra extension to cover damage caused by four-legged friends.
• Damage after pest infestations, such as mice, rats and wasps. You’ll usually need home emergency cover as an add-on for that.

Insurers usually set single item limits with their contents insurance of around £1,500 to £2,000. So unless you tell your insurer about anything that would cost more than the limit to replace, it won’t usually be covered. It may need to be listed separately or require extra cover.

If you buy or are given high-value items after taking out the policy, let your insurer know so your cover includes them. Try to keep receipts as proof of purchase.

How much home insurance should I get?

If you’re taking out buildings and contents insurance, the amount of cover should be enough to cover the cost of rebuilding your property and replacing everything in it.

With buildings insurance, the total value of the insurance policy is the cost of rebuilding it from the ground up, including labour and materials – this is different from the current market value of your home. Most insurers calculate the figure by the number of bedrooms in your home. If it’s a sum-insured policy – which sets a maximum amount an insurer will pay out on a claim – you’ll need to calculate the rebuild cost of the property and tell your insurer. Although some insurers may estimate this for you, it’s still worth making sure it’s enough.

To help you calculate the costs, the Association of British Insurers (ABI) has a free Home Rebuild Calculator on its website.

If your buildings insurance policy offers unlimited cover, you don’t have to find the rebuild cost. It’s unlikely to be the cheapest option though, so you may want to see if a sum-insured or bedroom-rated policy offers enough cover.

When you’re working out how much contents insurance you need, make sure the maximum amount of cover offered matches the value of all your belongings. Some insurers have a single item limit, so make sure it’s enough to cover any high-value belongings.

With contents insurance – even if you have an unlimited policy – there may be a maximum amount you can claim for single items, so always check. And for some unlimited buildings insurance policies, there may be a maximum payout possible for some types of claims.

How do you get the best deal on home insurance?

Whether you’re buying a new policy or your current policy is due to renew soon, you don’t have to agree to the first price you’re given.

You can shop around for the best home insurance deal matched to your needs using comparison sites. Our home insurance comparison tool compares quotes from over 40 providers, and the search takes just minutes. Once you’ve found the cover that suits you, you can buy online or over the phone.

You can also contact individual insurers directly, negotiate your renewal price with your current insurer, or use a broker to ask for home insurance quotes.

What influences the price of your home insurance?

When calculating your premium, an insurer will look at:

• The type of cover you choose, and whether it’s buildings or contents insurance, or both.
• If you are adding optional extras to your policy, such as accidental damage or home emergency cover.
• The rebuild cost of the property, which takes into account the size of your property and how it’s built, and for contents insurance, the total value of your belongings.
• The level of security in your home, including burglar alarms and smoke detectors, and the types of locks on doors and windows.
• The property’s location, and the risk of burglary and flooding in the area.
• Your claims history. You may get a discount if you haven’t made a claim against your home insurance at all, or for a while. Claims can bump up your premiums. Even so, the whole point of insurance is that it’s there for when things go wrong, and this shouldn’t put you off making a claim if you need to.
• If you choose a voluntary excess to pay on a claim, the higher your excess, the lower your premium will usually be.

More generally, what insurers charge customers will also be affected by the current rate of claims, insurance premium tax, and the changing cost of labour and repairs.

Home Insurance FAQs