Home insurance can shield you and your home from a whole host of risks. If you’re uninsured then a fire, storm or burglary could leave you in dire financial straits.
Yet with so many options out there it can be difficult to work out which home insurance policy is best for you. By the end of this guide though, you should feel confident and ready to bag an insurance deal for your first home.
What does home insurance cover?
Home insurance is actually better understood as buildings and contents insurance. Before diving into buying one or both of these two main types of policy (you can pick and choose) it’s vital you understand each will cover the different aspects of your home.
This type of policy will cover the bricks and mortar of your home, protecting the physical structure of the property. This includes the walls, windows and roof, as well as permanent features like kitchen counters, sinks, toilets and baths.
Contents insurance on the other hand is there to protect your possessions. So this might mean your gadgets, your artworks or your bicycle. But this type of policy will also protect any furniture and furnishings too.
Do I need home insurance?
Home insurance isn’t a legal requirement. However, if you have a mortgage, the lender may well demand you get buildings cover.
Even if it doesn’t demand you get insurance, you should take out a policy anyway. Unless you’re obscenely wealthy and own a private jet and island in the Caribbean, your home is probably the most valuable asset you own.
So home insurance can make sure you’re not left penniless should the worst happen to your home and its contents.
The right insurance policy will pay to rebuild your home, purchase new furnishings and get you back on your feet should disaster strike.
What is a covered event?
Here are some typical events that home insurers generally cover, should you need financial help replacing, rebuilding or repairing your home and its contents:
- Fire, lightning, an explosion or an earthquake
- Water escaping and damaging your home, such as a plumbing disaster destroying a bathroom
- Vandalism, for example local teens throwing a stone through the window
- Falling trees or branches
- Theft or attempted theft
- A vehicle colliding with your property
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How much home insurance do I need?
The amount of buildings cover you need will really depend on its “rebuild value”. You’ll need to get an estimate for this before taking out insurance and it’s vital you get an accurate figure.
Overshoot the rebuild value estimate and you will end up paying more than you have to in insurance. Undershoot and you won’t be fully protected should the worst happen.
One easy way to avoid this is to use the Association of British Insurers’ calculator. Or you can turn to a chartered surveyor for advice.
When it comes to your personal possessions, the amount of coverage you need depends on what you own and how valuable the items are.
Go through your property, taking an inventory of all your belongings and make notes for estimated value. You may well need to take out additional coverage for really expensive items like jewellery.
How do I buy home insurance?
The easiest and most common way of buying home insurance is by comparing home quotes online and purchasing a policy from the insurer’s website.
Or if you’re looking for a more personal touch you can buy insurance over the phone too.
When should I buy home insurance?
Most mortgage providers will demand you buy home insurance before offering you a mortgage for your house or flat.
How much does home insurance cost?
According to the AA British Insurance Premium Index the average home and contents policy costs about £162 a year.
However it really depends. There are a whole host of factors which affect the cost of your home insurance, including:
The sum insured. The more expensive your home and its contents, the higher the level of cover you’ll need. In turn this means paying more in premiums.
Optional coverage extras. You’ll pay more if you choose to buy optional extras like emergency cover or accidental damage protection.
Excess size. An excess is what you contribute towards a claim before the insurance money kicks in. Agreeing to a higher excess (to pay more out of your own pocket when claiming) will lower premiums.
Your home. Insurance companies will look at your property’s age and how it was built to work out your premiums. Certain properties are less resilient than others, so will be hit with higher insurance costs.
Your location. Your address plays a crucial role in determining your insurance costs, as certain areas have higher levels of crime or are more prone to flooding.
Claims history. People who frequently claim on their home insurance policy will incur higher premiums.
Security features. Homes which have state-of-the-art security cameras and burglar alarms will be seen as less likely to be broken into, which could lead to lower premiums.
How you pay. Insurers generally charge you more if you pay in monthly instalments, so try to pay in an annual lump sum.
To get an idea of what you will pay head to a few insurance companies’ websites. You can get some quotes by using their online calculators.
How can I save money on home insurance?
To get the best deal on your policy:
Buy online. Some insurers offer discounts to customers who buy online.
Agree to a higher excess. Opting for a higher excess will lower your premiums, although you will have to fork out more should you need to claim.
Install a security system. Installing burglar alarms or even just an extra door lock could convince your insurer to lower your premiums.
Look for discounts. Keep your eyes peeled for discounts. You might be able to buy a home and car insurance bundle for instance, saving money on both.
Shop around. The easiest way to keep costs down is to compare all your options before buying.
Pay annually. Try to pay for your home insurance in one fell swoop rather than in monthly instalments.
Home insurance is a necessity for every homeowner yet it doesn’t have to cost you an arm and a leg. Use price comparison websites and keep an eye out for discounts to keep costs down.
But don’t compromise on protection in your bid for the cheapest price. Make sure you get an accurate estimate for the rebuild value of your home and make sure you evaluate your contents properly.
You need to think what you would do in the event that your home and belongings were destroyed. Would you be protected?
Frequently asked questions about insuring your first home
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. When making a big financial decision, it's wise to consider getting independent financial advice, and always consider your own financial circumstances when comparing products so you get what's right for you.