Home insurance comes in two parts: buildings insurance and contents insurance. You need one, the other, or both depending on your situation.
Buildings vs Contents
| What’s Covered | Buildings | Contents |
|---|---|---|
| Walls, roof, floors | Yes | No |
| Kitchen and bathroom | Yes | No |
| Fitted carpets | Yes | Yes |
| Furniture | No | Yes |
| Electronics | No | Yes |
| Clothing | No | Yes |
| Garden structures | Yes? | No |
Buildings Insurance
Covers the structure of your home. Required by mortgage lenders.
| What It Covers | What It Doesn’t |
|---|---|
| Fire, flood, storm damage | General wear and tear |
| Subsidence | Lack of maintenance |
| Escape of water | Damage from gradual leaks |
| Theft (forced entry) | Items left outside |
| Vandalism | Intentional damage |
How Much Cover?
Insure for the rebuild cost, not the market value.
| Property Type | Average Rebuild Cost |
|---|---|
| 1-bed flat | £100,000-£200,000 |
| 2-bed house | £150,000-£300,000 |
| 3-bed house | £200,000-£400,000 |
| 4-bed house | £300,000-£600,000 |
Use the Building Cost Information Service calculator to estimate rebuild cost.
Contents Insurance
Covers your belongings inside the home.
| Category | Typical Value |
|---|---|
| Living room | £5,000-£15,000 |
| Bedrooms | £3,000-£10,000 |
| Kitchen | £3,000-£8,000 |
| Electronics | £2,000-£5,000 |
| Clothing | £2,000-£10,000 |
| Total | £20,000-£60,000 |
Single Item Limit
Most policies cap individual items at £1,000-£2,000. Valuable items (jewellery, watches, bikes, art) need “specified” cover.
| Item Value | Cover Type |
|---|---|
| Under £1,500 | Standard contents |
| Over £1,500 | Named item on policy |
Optional Add-Ons
| Add-On | What It Does |
|---|---|
| Accidental damage | Covers spills, drops, breaks |
| Legal expenses | Covers property disputes |
| Home emergency | Emergency repairs (plumber, locksmith) |
| Bike cover | Theft of bicycles |
| Gadget cover | Phones, tablets, laptops |
| Personal possessions | Cover away from home |
How to Save on Home Insurance
| Tip | Saving |
|---|---|
| Combine buildings + contents | 10-20% |
| Increase voluntary excess | 10-15% |
| Install a burglar alarm | 5-10% |
| Pay annually | 10-20% |
| Shop around at renewal | 20-40% |
| Don’t auto-renew | Most expensive option |
What to Do When You Need to Claim
| Step | Action |
|---|---|
| 1 | Document everything (photos, receipts) |
| 2 | Report to police if stolen |
| 3 | Contact insurer immediately |
| 4 | Keep damaged items (don’t throw away) |
| 5 | Get repair quotes |
| 6 | Don’t start repairs without approval |
Common Exclusions
| Exclusion | What to Do |
|---|---|
| General wear and tear | Not insurable — maintenance is your responsibility |
| Acts of war | Rare, can’t insure |
| Nuclear risks | Not insurable |
| Intentional damage | Insurance fraud |
| Untrimmed trees | Maintain your garden |
Bottom Line
If you have a mortgage, buildings insurance is mandatory. Contents insurance is optional but strongly recommended — most people underestimate the value of their belongings. Combine both policies, insure for the right amounts, and shop around at renewal.
What to watch out for
The most common mistake is underinsuring. People insure their home for its market value rather than its rebuild cost, or they guess their contents total without actually adding things up. Both leave you exposed. A claims settlement that covers only 60% of your rebuild cost or contents value means you absorb the rest yourself.
Another frequent error is auto-renewing without checking the market. Insurers know that inertia is powerful, and they quietly increase premiums at renewal while offering the best rates to new customers. Spending 20 minutes getting fresh quotes each year is one of the easiest ways to save £100 or more. Also watch for exclusions buried in the small print — wear and tear, gradual leaks, and unoccupied property clauses are common catches that catch homeowners off guard.
Keeping your cover up to date
Your home changes over time, and so should your insurance. A loft conversion, an extension, or a new kitchen all increase the rebuild cost. Similarly, buying expensive furniture, electronics, or jewellery means your contents total rises. Review your cover limits every year or two to make sure they still match reality.
If you have made significant improvements, tell your insurer before you claim — failing to update your cover can lead to a reduced payout. On the flip side, as your mortgage balance falls you may find that a lower rebuild cost is appropriate, potentially reducing your premium. A quick annual check keeps both the cover and the cost aligned with your current situation.