Home insurance protects your property and belongings against damage, theft, and disasters. If you have a mortgage, your lender requires buildings insurance. Contents insurance is optional but highly recommended.
Buildings Insurance
Covers the structure of your home — walls, roof, floors, fitted kitchens, bathrooms, and permanent fixtures like boilers and built-in wardrobes.
What’s covered:
- Fire and smoke damage
- Flooding and storm damage
- Subsidence and landslip
- Vandalism and malicious damage
- Falling trees and branches
- Aircraft or vehicle impact
What’s NOT covered:
- Wear and tear or gradual deterioration
- Damage from DIY or renovations (unless you notify your insurer)
- Faulty workmanship
- Fence panels and gates (usually excluded or limited)
- Damage from pets
Required by: Most mortgage lenders insist on buildings insurance before they’ll complete your mortgage.
Contents Insurance
Covers your personal belongings — furniture, electronics, clothing, jewellery, and anything you’d take with you if you moved house.
What’s covered:
- Theft and attempted theft
- Accidental damage (if included)
- Fire and flood damage
- Storm damage
- Vandalism
- Items lost or damaged away from home (usually up to a limit)
What’s usually limited or excluded:
- High-value items (jewellery, watches, art) over £1,000-£2,000
- Cash (usually limited to £200-£500)
- Bicycles outside the home
- Business equipment
- Wear and tear
Combined Policies
A combined policy covers both buildings and contents in one policy. Usually cheaper than buying separate policies.
| Policy Type | Typical Annual Cost |
|---|---|
| Buildings only | £100-£150 |
| Contents only | £50-£100 |
| Combined | £150-£250 |
Tip: Combined policies are best for homeowners. If you rent, you only need contents insurance.
How Much Cover Do You Need?
Buildings Insurance: Rebuild Cost
Your buildings cover should be based on the rebuild cost — what it would cost to reconstruct your home from scratch. This is NOT the same as market value.
| Home | Market Value | Rebuild Cost |
|---|---|---|
| 3-bed semi-detached | £280,000 | £180,000 |
| 4-bed detached | £450,000 | £250,000 |
| 2-bed flat | £180,000 | £120,000 |
The rebuild cost excludes land value, which doesn’t need insuring. Use the BCIS rebuild cost calculator or your mortgage valuation for guidance.
Contents Insurance: Replacement Cost
Insure your contents for replacement cost — what it would cost to buy everything new today. This is “new for old” cover, meaning a 5-year-old sofa is replaced with a new one.
Quick contents inventory (typical 3-bed house):
| Category | Estimated Value |
|---|---|
| Furniture | £8,000-£15,000 |
| Electronics | £3,000-£8,000 |
| Clothing | £4,000-£10,000 |
| Kitchen appliances | £2,000-£5,000 |
| Soft furnishings | £1,000-£3,000 |
| Miscellaneous | £2,000-£5,000 |
| Total | £20,000-£46,000 |
Most people underestimate their contents by 30-50%. Walk through each room and add up what you’d need to replace.
Understanding Excess
Excess is the amount you pay towards a claim. It’s made up of two parts:
| Type | Description |
|---|---|
| Compulsory excess | Set by the insurer based on your risk profile |
| Voluntary excess | Amount you choose to pay (on top of compulsory) |
Example: Compulsory excess £100 + voluntary excess £250 = £350 total excess per claim.
Increasing your voluntary excess from £100 to £500 can reduce your premium by 15-25%. But only choose an excess you can comfortably afford.
Common UK Home Insurance Claims
| Claim Type | % of All Claims | Average Payout |
|---|---|---|
| Escape of water | 25% | £3,000-£5,000 |
| Theft | 15% | £2,500-£4,000 |
| Storm damage | 12% | £2,000-£6,000 |
| Accidental damage | 10% | £1,500-£3,000 |
| Fire | 8% | £15,000-£30,000 |
| Subsidence | 5% | £20,000-£50,000 |
Key tip: Burst pipes are the most common claim. In winter, know where your stopcock is and keep heating on low when away.
Worked Example: 3-Bed Semi-Detached
Property details:
- 3-bedroom semi-detached house
- Market value: £280,000
- Rebuild cost: £180,000
- Contents value: £40,000
Recommended cover:
| Policy Element | Amount |
|---|---|
| Buildings insurance | £180,000 |
| Contents insurance | £40,000 |
| Voluntary excess | £250 |
| Accidental damage | Included |
Annual premium: Approximately £180-£220 for a combined policy.
Monthly cost: £15-£18 per month to protect your home and everything in it.
Tips for Getting the Right Cover
- Don’t underinsure — if you claim for £50,000 but your cover is £30,000, you only get £30,000
- Check rebuild cost — not market value. Use BCIS calculator or ask a surveyor
- Add accidental damage — costs 10-15% more but covers spills, cracks, and DIY mishaps
- Compare quotes annually — loyalty doesn’t pay. New customers often get better deals
- Protect no-claims discount — if you’ve built up several years without claims
- Declare home improvements — extensions, loft conversions, or new bathrooms increase rebuild cost
- Keep receipts and photos — essential for making a claim
- Check policy exclusions — know what’s not covered before you need to claim
Where to Buy UK Home Insurance
Comparison sites:
- MoneySupermarket
- CompareTheMarket
- GoCompare
- uSwitch
Direct providers:
- Aviva
- Direct Line
- LV=
- Churchill
- Admiral
Tip: Always read the policy documents, not just the summary. Key exclusions and limits are in the small print.
Key UK home insurance points
| Key Point | Takeaway |
|---|---|
| Buildings insurance | Covers structure — required by mortgage lenders |
| Contents insurance | Covers belongings — recommended for everyone |
| Combined | Usually cheaper than separate policies |
| Buildings cover | Based on rebuild cost, not market value |
| Contents cover | Based on replacement cost (new for old) |
| Excess | Higher voluntary excess = lower premium |
| Don’t underinsure | Most common mistake — check rebuild cost |
| Compare annually | Shop around at renewal for best price |
References: MoneyHelper, Which?, Association of British Insurers (ABI)
Getting the right cover in place
Start with buildings insurance if you have a mortgage — your lender will require it before they complete the mortgage, and it protects the structure of your home against fire, flood, storm, subsidence, and vandalism. The cover amount should reflect the rebuild cost, which is the cost of reconstructing your home from scratch, not its market value. A 3-bedroom semi-detached house worth £280,000 on the market may have a rebuild cost of only £180,000, because market value includes land which does not need insuring. Use the BCIS rebuild cost calculator or ask a surveyor for guidance.
For contents insurance, walk through every room and estimate the replacement cost of your belongings. The average UK household has £40,000 or more in contents, yet most people underestimate by 30-50%. Furniture typically runs £8,000-15,000, electronics £3,000-8,000, clothing £4,000-10,000, and kitchen appliances £2,000-5,000. Add it all up and you will likely be surprised. A combined policy covering both buildings and contents is usually cheaper than buying them separately — expect to pay around £150-250 per year for a typical 3-bedroom semi-detached, or roughly £15-18 per month. Adding accidental damage cover costs 10-15% more but protects against spills, cracks, and DIY mishaps that are otherwise excluded.
Errors that cost UK homeowners money
The single most expensive mistake is underinsuring. If you claim for £50,000 but your cover is only £30,000, you receive £30,000 — the insurer applies an “average” and reduces your payout proportionally. This applies to both buildings and contents. The most common cause of underinsurance is confusing market value with rebuild cost for buildings, and simply guessing the contents value rather than doing a proper inventory. A second error is not checking policy exclusions before you buy. Standard home insurance excludes wear and tear, fence panels and gates (usually limited to around £250), damage from pets, and unoccupied properties beyond 30 days. Japanese knotweed is typically excluded entirely.
A third mistake is failing to declare home improvements. Extensions, loft conversions, new bathrooms, and fitted kitchens all increase the rebuild cost of your property. If you extend your house and do not tell your insurer, you may be underinsured at the exact moment you most need cover. Similarly, high-value items such as jewellery, watches, and art worth more than £1,000-2,000 need to be specified separately — the standard single-item limit will not cover them fully. Finally, not comparing quotes at renewal is a persistent error. Loyalty does not pay in UK home insurance — new customer deals are consistently cheaper, and switching takes minimal effort through comparison sites like MoneySupermarket, CompareTheMarket, or GoCompare.