What home insurance do you need? A guide to buildings, contents and specialist cover

Whether you own, rent, or have a unique property, we're here to help you make an informed decision and ensure your home and belongings are properly protected.

What is home insurance and what does it cover?

Home insurance protects your home and belongings financially against damage from events like fire, storms or theft.

There are 2 types of home insurance:

1. Buildings insurance

Buildings insurance covers the structure of your home and its permanent fixtures. This is often required by mortgage lenders. A typical buildings insurance policy will include:

• Walls, roof, floors and ceilings

• Permanent fixtures such as bathrooms, kitchens and fitted wardrobes

• Garages, sheds and other outbuildings

It can cover damage caused by:

• Fire

• Flood

• Storm or wind damage

• Theft or vandalism

• Subsidence (although this sometimes requires specialist cover)

2. Contents insurance

Contents insurance protects your personal belongings inside the home. Typical cover includes:

• Furniture, electronics and appliances

• Clothing, jewellery and personal items

Contents insurance typically covers damage caused by:

• Fire

• Flood

• Storm and wind damage

• Theft or attempted theft

• Accidental damage (this is sometimes offered as an optional add-on)

Do you have to have home insurance?

You're not legally required to have home insurance, but it's highly recommended. Most mortgage lenders will require you to take out a buildings insurance policy before approving your loan, as it protects their investment and your property.

Even if you own your home outright, having home insurance can save you from major repair or replacement costs caused by fire, theft or other damage. It's an important way to protect your home and give yourself peace of mind.

Renters, on the other hand, aren't responsible for insuring the building itself. That's the landlord's job. Buying contents insurance is a good idea though, as it covers your personal belongings against risks like fire, theft, or accidental damage.

What about unoccupied or empty house insurance?

When a house is left empoty, it's considered 'unoccupied'. During this time, your home is at higher risk of theft, unnoticed leaks, and more. These risks can affect your home insurance coverage.

Typically, a standard home insurance policy won't cover your home if it's left unoccupied for more than 30 days. In this case, you'll need unoccupied home insurance: a special policy that protects against risks like vandalism, fire, or water damage while the house isn't lived in.

This type of cover is especially useful during long renovations, between tenants, or when selling a vacant property.

How much does home insurance cost?

The cost of home insurance varies depending on factors like your property's location, size, and the level of cover you choose. Generally, buildings insurance tends to cost more than contents insurance, but many providers offer combined policies that can be more affordable.

Other factors that affect your premium include your home's age, security features, and how likely it is to experience risks such as flooding or subsidence. Even details like your postcode or whether you've made claims before can influence the price.

Key factors that can affect the price include:

• Rebuild cost vs. market value: Insurers base their calculations on the rebuild cost, not what your house could sell for. The rebuild cost is how much it would cost to completely rebuild your home from scratch if it were destroyed, including labour, materials, and professional fees. Usually, this is lower than the market value, which includes the land price and local property demand.

• Value of contents: This is the total value of your belongings, including furniture, electronics, and personal items. Make sure your contents cover reflects the total value of your belongings, known as the 'upper limit'. You'll also want to check the single item limit for valuables like jewellery, art, or electronics. Items above the single-item limit may need a separate high-value contents policy to be fully covered.

• Location: Homes in flood-prone or high-crime areas usually cost more to insure.

• Type of property and construction materials: Older homes or those built with non-standard materials may be more expensive to cover. This is because it will be more costly to replace these materials or make repairs in the event of any damage.

• Claims history: Previous home insurance claims can increase your premium, whereas your no claims bonus can earn you a discount for every year you don't make a claim.

When choosing your cover, it's important not to over-insure. Overestimating rebuild costs or contents value means you'll pay more than necessary, while under-insuring could leave you out-of-pocket if you ever need to make a claim.

Taking time to get accurate estimates helps to ensure you're fully covered, as well as not overpaying.

How can I save money on my home insurance?

1. Shop around and compare quotes

Prices can vary widely between insurers, so it's worth comparing policies before you renew. Don't just look for the cheapest option. Make sure it includes the right level of cover for your property and belongings.

2. Increase your excess

Choosing a higher voluntary excess (the amount you pay towards a claim) can lower your premium. Just be sure you could afford that amount if you ever need to make a claim.

3. Improve home security

Installing approved locks, burglar alarms, or monitored security systems can reduce your risk of theft and help you qualify for discounts.

4. Build up a no claims bonus

If you don't make any claims for several years, most insurers will reward you with a no claims discount. this can add up to a worthwhile saving over time.

5. Pay annually instead of monthly

Paying for your policy in one annual lump sum is often cheaper, as many insurers add interest or admin fees to monthly payments. But make sure to review your policy carefully each year. Automatically renewing your policy can lead to paying more than necessary. Insurers often increase premiums slightly at renewal, so reviewing your policy annually and comparing quotes can save you money.

6. Avoid over-insuring

Only insure your home for the rebuilt cost, not the full market value, and make sure your contents cover reflects the true replacement cost of your belongings.

7. Combine buildings and contents insurance

Taking out a combined policy from the same insurer can often by cheaper than buying them separately.

The different types of home insurance

There are a variety of different types of home insurance, each with their own specific requirements:

Rented accommodation

If you're renting a house or flat, the building itself is the landlord's responsibility - you don't need to insure the structure. However, contents insurance is highly recommended to protect your personal belongings against theft, fire, or accidental damage.

Your own property

If you own your home, you'll need buildings insurance to cover the structure against risks like fire, flood or storm damage. Contents insurance protects your belongings inside the home. Many homeowners choose a combined policy, which covers both buildings and contents in a single plan, often making it more convenient and cost-effective.

Non-standard properties

Homes that are older, listed, timber-framed, or built with non-standard materials may not be fully covered under standard policies. These are considered high-risk due to potentialy repair costs and specialist materials required.

Examples include cottages, converted barns, and eco-friendly homes with unusual construction. For these properties, specialist insurance ensure you have the right cover for both the structure and the contents.

Holiday homes

Standard home insurance policies often include a limited unoccupancy clause, which may exclude cover if a property is left empty for long periods. Holiday homes are typically vacant for weeks or months at a time, so they require specific holiday home insurance that protects against theft, vandalism, and accidental damage while unoccupied. If you rent out your holiday home, a holiday let insurance policy might be a better fit.

Properties with subsidence

Subsidence occurs when the ground beneath a property shifts, causing structural damage. It's often excluded from standard home insurance policies because it's high-risk and expensive to repair. Homeowners in areas prone to subsidence might need specialist cover, which can include structural monitoring and professional surveys as part of the policy.

How to choose the right home insurance policy for you

Finding the right home insurance policy is about balancing protection, cost, and your individual needs. There's no one-size-fits-all solution, so understanding what's covered, what isn't, and the risks specific to your property is essential.

Before you get a quote, think carefully about the level of cover you'll need. Here are a few things to bear in mind before you start comparing:

• Choose a policy that covers your property type, location, and the value of your belongings.

• Decide whether you need buildings, contents, or a combined home insurance policy.

• Be aware of exclusions, such as unoccupancy, subsidence, or non-standard construction.

• Consider optional extras like accidental damage, personal possessions outside the home, or legal expenses.

• Compare multiple quotes. Don't just stick with your current insurer or auto-renew each year.

• Check for discounts, including security features, no claims bonuses, and combined policies.

Before you get a quote, make sure you've considered the following:

• What type of property do you have? (Standard, non-standard, listed, holiday, home).

• What is your home's rebuild cost?

• How much are your contents worth?

• How long is your property likely to be unoccupied?

• Are there any high-risk factors like flood zones, subsidence, or a history of claims?

• What level of voluntary excess can you afford?

• Do you qualify for a no claims bonus or other discounts?

• Are you looking for optional extras, such as accidental damage or legal protection?

Comparing home insurance is the best way to find the best value policy for your individual needs.

Finding a quote with money.co.uk is a quick and easy way to find the right level of insurance at a competitive price.