Home insurance
There is insurance to protect your home and its contents, for example:
What it does
It usually pays out if your property is destroyed by fire, floods or subsidence (although you will need to check if you live on a flood plain, for example). Damage to fixed fittings such as baths and kitchens are often included, as well as sheds, greenhouses and garages.
You might be offered buildings insurance when you take out your mortgage, but you don't have to take what's on offer. Use the key policy information to shop around and get the best deal for you.
If you purchase a leasehold property (such as a flat in a block of flats) the freeholder may have arranged buildings insurance for the whole block, in which case you may not need your own buildings policy.
What's covered
Your cover is based on what your home would cost to rebuild. You can check whether you have enough buildings insurance through the Building Cost Information Service (BCIS) website. It has an online tool to help you calculate the sum you should insure your building(s) for, in case your home has to be entirely rebuilt.
You need to tell your insurer if you extend your property, for example with a loft conversion or conservatory. Your belongings are not covered – these need to be covered separately with Contents insurance.
Keeping costs down
As always, shop around. You may also find that you get a better deal if you buy buildings and contents insurance together. Most policies have a standard excess charge which means you agree to pay the first part of any claim, for example the first £50 or £100. If you agree to pay a higher excess you might get a cheaper policy. Always compare what's covered by a policy, not just the price – the key policy information will help you do this. Some might be cheaper than others, but they may not offer the same level of protection.
What it does
Although flood damage may be covered under your buildings insurance, if you live in a high-risk area, you may want to consider taking out stand-alone flood insurance as well.
The Environment Agency have created a Flood Map (see Related links) which gives a national assessment of the likelihood of flooding. This information is used by insurers as a basis to working out premiums.
The Flood Map shows the likelihood of land being flooded, not individual properties. Even if your own home is not affected (for example you live in a third-floor flat) the local area could be – your car could be washed away, you may not be able to get into or out of your home, and your power, gas or water supplies may be interrupted.
What isn't covered
Insurance cover against flooding is generally available for the vast majority of properties in the UK. However, insurers cannot guarantee to provide cover in all circumstances.
Clicking on your area on the Flood Map will tell you if the likelihood of your area flooding is classed by the Environment Agency’s National Flood Risk Assessment as ‘Low’, ‘Moderate’ or ‘Significant’. If you live in an area classed as ‘Low’ or ‘Moderate’, then any insurer who is a member of the Association of British Insurers (ABI) will offer flood cover in the normal way on buildings and contents policies. This applies to both existing policyholders and new customers.
In areas where the likelihood of flooding is ‘Significant’, cover may depend on various issues, including what improvements are in place for permanent flood defences. However, insurers who are ABI members will endeavour to work with policyholders to continue or provide cover.
In all cases, insurance terms are set by the insurer and will reflect differing degrees of risk. There may be reasons that are not related to flood risk which mean that an insurer may choose not to offer insurance.
Keeping costs down
Insurers will generally take account of measures you have taken to reduce flood risk, such as removable household flood products, but they may want you to provide a report from an independent professional who is experienced in carrying out flood risk mitigation surveys.
The ABI and the Environment Agency have several useful guides and reports on flood insurance and flood damage – see Related links.
What it does
It covers the loss of or damage to the contents of your home, including your furniture, electrical goods and other items within your home, and also items you take outside, for example cameras, jewellery and briefcases. Different policies offer different levels of cover but generally you'll be covered against theft and fire, and have the option to insure against damage you may cause by accident.
If not already covered by your contents insurance, you may want to consider travel insurance for loss or damage to your personal belongings whilst travelling. For more information see Travel insurance.
What's covered
Some companies have limits on the value of any one item under the general policy so you'll need to specify individual items such as expensive jewellery or camera equipment, for example. Your cover may also be affected or cancelled if you leave your home empty for a long period of time, or if you let it out. Damage to the building itself is also not covered; this needs to be covered separately with Buildings insurance.
Keeping costs down
Many insurers will offer discounts if you have a burglar alarm or window locks or if you're a member of a Neighbourhood Watch scheme. You may also get a deal if you combine contents and buildings insurance.
Most policies have a standard excess charge, which means you agree to pay the first part of any claim, for example the first £50 or £100. If you agree to pay a higher excess you might get a cheaper policy.
Always compare what's covered by a policy, not just the price – the key policy information will help you do this. Some might be cheaper than others, but they may not offer the same level of protection.
Level of cover
Some contents insurance policies offer new for old. This means they'll replace old damaged appliances and possessions with new ones when you claim.
Bear in mind that your premiums may increase the following year, or the insurance company may refuse to cover you for the same risk if it happens more than twice, for example.
Top tips
- Read the paperwork and ask questions if you don't understand anything.
- Make sure you check what you're covered or not covered for.
- Shop around when it comes to renewal time to make sure you're getting the best deal.
