What is home insurance and how do I get a good deal?

There are two main types - buildings insurance and contents insurance.

These can either be bought individually or together as a combined home insurance product. 

This covers you in the event of damage to the structure of your home, such as the walls, roof and floors. It usually covers damage to fixtures and fittings too. It’s not compulsory, but it’s usually a condition of your mortgage to have it. If you own your own home, with or without a mortgage, this insurance should be a top priority.

This covers you for loss or damage to personal possessions in the event of fire, theft, flooding and similar incidents. It covers all your personal belongings – anything not physically attached to the building – against the cost of loss or damage.

Unlike buildings insurance, this is optional. But insuring your possessions is generally a sensible idea for both tenants and homeowners.

Many people will need both buildings and contents insurance, but some will only need one type of cover.

You may need both if:

• You’re a homeowner. You probably need both. While buildings insurance isn't a legal requirement, it will usually be required by your mortgage lender. Even if you own outright (i.e. there is no mortgage) it’s still usually a good idea, as it covers repair or rebuilding costs in the event of damage - and those costs can be very high.
• You own the freehold to your property. It can be very expensive to repair any structural damage, so cover is highly advisable. If you own the freehold on a flat or maisonette you might be able to take out a single buildings policy with other owners.
• You’re a landlord. Your mortgage lender will likely require that you have buildings insurance in place, and it’s sensible to have contents insurance if you’re providing the furnishings in the property. One option is to take out landlord insurance, which protects your property as well as your rental income and covers your liabilities in the event of damage or injury suffered by your tenants.

You may not need both if:

• You’re a tenant. You’ll likely only need contents insurance. You don’t need to take out buildings insurance, as it will be your landlord’s responsibility to make sure the right cover is in place. But if you want your possessions to be insured, it’s up to you to take out contents insurance, not the owner/landlord. Find out more in our blog about I'm renting my home do I need insurance?
• You own a leasehold flat and don't own part of the freehold. The building will likely be insured by whoever owns the freehold but you may have to pay a contribution to the cost of insurance through your service charge.  If you do own part of the freehold with other leaseholders, you will jointly be responsible for taking out buildings insurance. Your solicitor will be able to advise you if your lease means you have to take out buildings insurance separately.   Either way, you’ll need contents cover if you want your belongings to be protected.

If you do need both buildings and contents insurance, it’s usually cheapest to buy them together on a combined policy rather than taking out two separate ones.

Having one policy in place can also make it easier and quicker if you do need to claim on both your buildings and contents cover.

• Increase security: some insurers will only insure you if you have BSI-approved locks on all outside doors and windows. Most insurers will help you work out which locks you already have. You might also get a reduction for joining your local Neighbourhood Watch scheme and installing security lighting.
• Install alarms: smoke and burglar alarms are both important. Make sure they’re approved models – a NACOSS alarm (National Approvals Council for Security Systems) could earn you a discount on your premiums (although what you save in lower premiums is unlikely to cover the cost of the alarm).
• Increase the excess on your policy: if you’re happy to cover a bit more of the cost of a claim yourself, your premiums might be lowered.
• Build your no-claims discount: if you don’t claim for a few years you might get a discount, but not all companies offer this, so check before you buy.
• Buy buildings and contents insurance together: you might get a discount if you get both from the same company.
• Pay annually: monthly premiums can cost more. There’s usually an extra 6% charge to pay monthly. Though some insurers will allow payment by instalments for no extra charges so it’s worth shopping around.
• Take advantage of offers: some insurers guarantee to beat any quote (or the renewal of your current policy) by up to 10%, on a like-for-like basis.
• Check you don’t already have it: you may have some form of home insurance as part of a packaged current account. If you do already have enough cover in place there’s no need to pay for a separate policy. 

• Comparison websites: these are a good way to find insurance that fits your needs. But remember that the cheapest policy isn’t necessarily the best for you, so don’t simply pick the first one you see. Follow our golden rules for using comparison sites to buy insurance and see our guide on Finding the best deal with price comparison websites.
• Direct from insurers: not all insurers are covered by comparison sites - Aviva, Zurich and Direct Line are among the big names that don’t appear - and their products can only be bought directly.
• Insurance brokers: they can help you get the most suitable home insurance for your circumstances, particularly if you have complicated needs (i.e. you’re a landlord insuring several properties). See our guide on When to use an insurance broker.