Buying a new home is the biggest
purchase most people will make throughout their life, but sorting through all
the paperwork can make the rewarding process of purchasing a home feel like a
chore. When it comes to insurance, homeowners may find themselves overwhelmed
and wondering what they really need from their cover.
This could explain why as many as
1 in 4 homes in the UK don’t have any form of home insurance, accounting for 6
million homes. But it doesn’t need to be overwhelming - buildings insurance and
home contents insurance sound similar, but each form of protection covers
different aspects of your home. Below, we explore what both of these types of
insurance are and why you need them.
What is Buildings Insurance?
Buildings insurance covers the
cost of repairing any damage to the physical structure of your property caused
by anything from fires and storms to theft and vandalism. Walls, floors, roofs
and even garages, fences and sheds are all structures covered by buildings
insurance. The cost of replacing drains, pipes and cables is also covered. If
anything were to happen to your home, your buildings insurance should cover the
entire cost of rebuilding it, including demolition, site clearance and
architect’s fees. It is usually required if you are purchasing a home with a
mortgage.
What is Home Contents Insurance?
Home contents insurance protects
your possessions within your property against damage or destruction. Furniture,
decorative items and appliances are all counted as possessions. Some policies
even cover items that have been taken out of the home, or on holiday. Home
contents insurance is not commonly required when purchasing a home, but it
comes in handy for instances such as theft, flooding or accidental damage.
What’s the Difference Between
Building and Contents Insurance?
The difference in what is covered
by either policy can be thought of as structures which are permanently fixed,
and items which are able to be moved. This seems obvious enough, but when it
comes to fixtures and fittings such as a fitted bathroom or a fitted kitchen,
it can be harder to identify what falls under ‘buildings’ and what falls under
‘contents’. Generally, fitted rooms and laminate flooring would be covered by
buildings insurance whereas carpets would be protected by contents insurance.
Most policies will carry an
excess, which means you will foot the bill until a certain point – normally
around £50 to £100. If you need to make a claim, some home contents insurance
policies will pay the amount that your possessions are currently worth, however
most have a ‘new for old’ cover which awards the full cost of stolen, damaged
or lost items. Policies can vary on these points so be sure to pay attention to
these details when researching what insurance is right for you.
Water damage is the most common
home insurance claim, with 1.8 million paid out in the UK every day for ‘escape
of water’ claims. In the case of a flood, having only one type of insurance
would leave you liable for replacing the cost of the other, which can be
eye-wateringly expensive. The average value of home contents is in excess of
£35,000 whereas a combined contents and buildings insurance policy costs an
average of £307 a year, or £6 per week.
Homeowners can shop around on
comparison websites like Compare The Market, Go Compare or MoneySuperMarket.
These websites use filters personalised to your needs, taking the stress out of
searching for the perfect policy.
Originally posted on 18th August 2022 by https://www.millerhomes.co.uk/blog/2022/august/home-contents-insurance-vs-buildings-insurance,-c-,-why-you-need-both.aspx