What Is Home Insurance? Your Comprehensive Guide

Our homes are often one of the most important aspects of our lives. Whether you own or rent, having a comfortable place to live makes a massive difference to wellbeing. But what if something were to happen to your home or your belongings? Could you afford to repair or replace them?

That’s where great home insurance comes in. While it can seem like a complicated topic, our guide breaks down exactly what home insurance is and what it covers so you can spend less time researching and more time enjoying the home you love.

Home insurance is a type of financial protection. In return for paying a regular fee (also known as a “premium”), the insurer agrees to pay some or all of the cost of repairing or replacing your property and/or belongings if they’re damaged, destroyed, or stolen.

Home insurance policies cover the fabric of your property and/or belongings, depending on whether you take out buildings or contents insurance—or both. You’re usually covered for destruction or damage caused by:

Home insurance doesn't usually cover the normal wear and tear that happens over time, such as rusting pipes or rising damp. It also doesn't tend to cover pest infestation or accidental damage, such as dropping a lamp or spilling wine on your carpet. However, some policies allow you to add this as an extra.

It's worth checking the limits of your cover—if your home or belongings are of high value and you don't have enough insurance, you may end up out of pocket. Your insurer can also refuse a claim if you’ve misrepresented the value of your items.

No, you don’t legally need home insurance. However, your mortgage provider may require you to purchase buildings insurance before they release the funds necessary for completion. This is because your property secures the loan, i.e., if you don't repay your mortgage, the lender can take your home to settle the debt. As such, they want to ensure something is left in case this happens.

If you’re a leaseholder, you may not need separate buildings insurance because your freeholder may have cover already. It's worth checking before you purchase.

In the UK, you can usually find the following types of home insurance:

Buildings insurance covers the physical structure of your property plus any installed fixtures and fittings. You’ll be reimbursed for repairing or rebuilding your property in the event of a disaster like a storm, flood, fire, or destructive vandalism.

Contents insurance covers the cost of replacing your belongings and furnishings if they’re destroyed or damaged in a fire or flood. It will also cover home burglary. Some contents insurance policies also cover theft outside the home.

A combined policy includes buildings and home contents insurance together. This can be cheaper than purchasing the policies separately and can also give you less admin with only one provider to deal with.

As a landlord, you may prefer to take out specialised insurance, which, in addition to covering your property for general damage, will also cover damage caused by your tenants and loss of income if they don’t pay rent.

Renters insurance (aka tenants insurance) covers not only your possessions but also accidental damage to your landlord’s property or any items belonging to it.

There are a number of benefits to taking out home insurance:

The level of coverage you need will depend on a number of factors, including the type of insurance, your property's details, and the value of your possessions. It’s worth taking the time to assess how much cover you need as accurately as possible so you’re fully protected. You should also double-check claim limits as a whole and on individual items.

The cover limit for your building should be enough to rebuild your property fully. You could work with a professional surveyor to get an expert assessment of your home’s value and any particular risks. You could also use an online calculator, such as the Building Cost Information Service tool.

It’s best to reassess your building’s value every 3 years or so, especially if you’ve made alterations such as adding an extension, which could change the rebuild cost.

Start by creating an inventory of your belongings. You can then assign value based on the cost of replacing them—an internet search can help you understand this. Don’t forget to include furnishings like curtains and carpets.

It's good to note particularly valuable items such as laptops, mobiles, or jewellery. You may want to get some items professionally valued, such as antiques or gemstones. Very expensive possessions may need separate insurance as an add-on, which can be called “extra personal belongings,” “valuables,” or “high-value contents,” depending on the policy.

If you don’t have home insurance, you’ll be liable for the full cost of repairing or rebuilding your home in the case of a disaster. You’ll also need to pay to repair or replace your belongings and furnishings. This could be a huge bill of thousands or even hundreds of thousands of pounds.

Home insurance can help you avoid unmanageable financial strain by covering some or all of the costs arising from an emergency. It can also help you meet less significant costs, such as replacing items stolen in a burglary or fixing a broken roof.

Buildings insurance is a type of home insurance that only covers the structure of your property. Usually, when people say they have home insurance, they mean they hold a combined policy that covers both the building and the contents.

If you need to get both buildings and contents insurance, it’s usually cheaper and more efficient to get them together in the same policy. The only time you might want to buy them separately is if you need a specific inclusion that only one insurance provider covers.

However, you may need to buy separate contents insurance if you’re buying a leasehold property that already has buildings insurance in place. This can also apply to renters.

When choosing your home insurance policy, you should consider the following:

If you want to get the cheapest home insurance that’s right for your property, shop around and compare quotes. In addition, consider the following:

How you claim will depend on your provider. Some allow you to claim online, whereas others will ask you to call a hotline. You’ll need to tell your provider the details of what’s happened. Have your policy documents to hand to refer to your policy number. Your provider will assess the claim and settle it with a cash payment, vouchers, or replacement products.

To support your claim, it could be useful to photograph any damage and create a list of what’s affected. If the problem is burglary, make sure you get a crime number from the police when you call them.

To get a home insurance quote, you’ll need to enter some details about your property and yourself. This will usually include the location and age of the property, its security features, some details of construction such as roof style, and your marital status and profession.

Your quote will tell you the premium cost. You may be able to stipulate what excess fee you want to pay, which can adjust the premium price. You can also sometimes add on extras to your plan, which will often increase the amount quoted.

Home insurance is a financial product that you pay into regularly. If something disastrous happens to damage or destroy your home, your insurer will then reimburse you for the cost of rebuilding or repairing it, as well as replacing your belongings.

In most cases, it’s worth having home insurance. The cost of rebuilding your home after a disaster could run into hundreds of thousands of pounds, and most people can’t manage the financial burden. Having insurance gives you peace of mind. Additionally, you may be required to take out buildings insurance when you get a mortgage.

Most home insurance policies don’t cover normal wear and tear, pest infestations, blocked gutters, or frost damage. It’s important to check your policy to understand what’s included and what’s not.