Home insurance is made up of both contents insurance and buildings insurance. While contents insurance is not mandatory, buildings insurance is often a requirement by mortgage companies to protect the property. To start looking for an insurance provider, research and data-driven personal finance site NimbleFins has compiled a list of cheap home insurance companies and has a tool for comparing home insurance quotes.
Price is a factor for homeowners when searching for a home insurance policy. But it is equally as important to have a policy that offers the best features and has good customer service.
It can be tempting to choose a higher excess to lower the cost and opt-out from additional features to keep the price down, but it is vital to assess what is really important to have as cover before choosing a policy on price.
On a basic level, it is essential to have enough cover to meet the cost of repairing contents if the worst should happen and rebuilding the property from scratch is required. To work out the cost of repairing BCIS, the Building Cost Information Service has a rebuild cost calculator.
Other features a homeowner may want to include in a policy are:
- Home emergency cover, which will include a phone number for call outs to fix emergency damage.
- Accidental damage to cover the structure of the home from incidents such as falling through a floorboard or the contents such as a stain on a carpet.
- Public liability, which will cover the homeowner if they are sued from an incident in their home.
- Alternative accommodation if the property becomes uninhabitable after a fire or a flood.
What features are included in a policy will impact the price.
Do I need home insurance?
Home insurance, as a package of contents and buildings insurance, is not a legal requirement. However, building insurance can be mandatory for mortgage deals, so an owner may be required to have it unless the property is owned outright.
Even when it’s not a requirement of a mortgage contract, insurance is hugely important to protect what is probably the homeowner’s largest asset.
Contents insurance protects the valuable belongings inside the home by covering the cost of replacing them. For a basic package, this will include furniture, clothes, jewellery, and electrical items like mobile phones if damaged or destroyed by fire, flood, water damage, or stolen items.
Buildings insurance offers protection to the structure of the property from the roof and walls to fitted cupboards, windows and floors. This type of insurance is also for damage caused by a disaster such as a fire or a flood.
Extra cover can be added to both contents and buildings insurance policies to protect against accidental damage, such as spilling wine on a carpet (contents insurance) or hammering a nail into a pipe (building insurance).
Having a basic insurance package is vital for homeowners to protect their homes and possessions, but the level of cover is up to the homeowner. There are tips to keep the cost down, but additional features can be included in a policy that, while increasing the price, could also be vital for some.
There is the choice of trying to keep the premium low by increasing the amount of excess on the policy, which is possible as long as the policyholder is happy to pay the full amount if the worst happens.
The fewer additional features on the policy, the cheaper it will be, but it is important to really think about what benefits the homeowner.
Extra cover can include:
- Accidental damage,
- Public liability,
- Home emergency,
- Legal expenses cover.
These extra options may cost more, but home emergency cover provides a callout to fix emergency damage. Accident damage offers cover if the homeowner or a visitor damages the property or the contents. Both of these can be useful covers, so it is worth weighing up the cost against what protection is really needed.
It is important to carefully read what is included in a policy as well as what conditions and exclusions there may be. For instance, working from home affects the insurance cover and how long the home can be left unoccupied before it is deemed empty and the cover is limited or void.
Does a mortgage require home insurance?
Mortgage companies will often want buildings insurance to give financial protection to the property.
Buildings insurance and contents insurance can be purchased separately, but it is cheaper to buy both combined as a home insurance policy.
