Home insurance comes in two main parts: buildings insurance and contents insurance. You can buy them separately or as a combined policy. Which you need depends on whether you own or rent, and what you're looking to protect.
Buildings insurance
Buildings insurance covers the physical structure of your home — walls, roof, floors, windows, doors, fitted kitchens and bathrooms, and permanent fixtures like built-in wardrobes. It also covers outbuildings, garages, fences, gates, and driveways. If your house burned down or was severely damaged by a storm, buildings insurance pays for the repair or rebuild.
If you have a mortgage, your lender will almost certainly require you to have buildings insurance. It's their security at risk as well as your home. Leasehold flat owners don't usually need their own buildings insurance — the freeholder arranges it for the whole building and the cost is included in the service charge.
Getting the rebuild cost right
Buildings insurance is based on the rebuild cost — what it would cost to completely rebuild your home from scratch — not the market value. The rebuild cost is usually much less than the market value because it doesn't include the land. A house worth £300,000 might have a rebuild cost of £180,000.
The Building Cost Information Service (BCIS) calculator from RICS gives a reasonable estimate. Your insurer may also provide a calculator. Getting this figure wrong is risky — underinsure and you might not receive enough to rebuild; overinsure and you're paying more than necessary.
Contents insurance
Contents insurance covers everything that isn't part of the building itself — furniture, electronics, clothing, jewellery, appliances, and personal possessions. If your home is burgled, flooded, or catches fire, contents insurance replaces or repairs your belongings.
Tenants should have contents insurance even though they don't need buildings insurance. Your landlord's policy won't cover your possessions.
Valuing your contents
Most people significantly underestimate the total value of their belongings. Walk through every room and add up what it would cost to replace everything. Kitchen appliances alone can easily reach £2,000-3,000. Clothing, electronics, furniture — it adds up fast. A typical three-bedroom house might have £40,000-60,000 worth of contents.
High-value single items (usually over £1,000-2,000) often need to be declared separately. Jewellery, watches, art, and specialist equipment may need to be listed individually with valuations. Check your policy's single-item limit.
What's typically covered
Standard policies cover damage from fire, theft, storm, flood, subsidence, escape of water (burst pipes), and impact damage. Most also cover accidental damage as standard or as an optional add-on. Some specifics to watch for:
Escape of water is one of the most common claims. A burst pipe or leaking washing machine can cause enormous damage. Most policies cover this, but check for exclusions around gradual leaks versus sudden events.
Subsidence cover typically has a higher excess — often £1,000 compared to the standard £100-250. If your property has a history of subsidence, getting cover can be more difficult and expensive.
Accidental damage — spilling wine on a carpet, putting your foot through a ceiling while in the loft, a child kicking a football through a window. Not always included as standard, but often worth adding for a modest extra premium.
What's typically excluded
General wear and tear, damage from poor maintenance, deliberate damage, and damage caused by pets are standard exclusions. Most policies also exclude damage from gradually operating causes — if your roof has been leaking for months, that's a maintenance issue rather than a sudden insurable event.
Flooding from external sources (rivers, surface water) is covered by most policies, but if you're in a high-risk flood area, premiums can be very high. The Flood Re scheme, backed by the government, helps ensure affordable flood cover is available for residential properties.
How to get the best price
As with all insurance, shopping around is the single most effective way to save. Use comparison sites and check direct-only insurers. Beyond that:
Increase your voluntary excess — this reduces your premium. But keep it at a level you can comfortably afford.
Improve security — British Standard locks, burglar alarms, and secure windows can qualify for discounts. Some insurers require specific security measures for the policy to be valid.
Combined policies — buying buildings and contents from the same insurer is usually cheaper than two separate policies and simpler to manage.
Pay annually — monthly instalments include interest, typically at 15-25% APR.
Don't over-declare — be accurate with your contents valuation. Overestimating wastes money on premiums. Underestimating leaves you exposed.
Making a claim
Report the incident to your insurer promptly. Take photographs of the damage before any cleanup. Keep receipts for emergency repairs. For theft, report to the police and get a crime reference number — your insurer will require this. Most claims are settled within a few weeks, though complex ones (subsidence, major flood damage) can take months.