What is home insurance?

Last updated by mustard.co.uk on July 21st, 2020

Having the right insurance is vital for protecting your home and belongings but knowing what to look for can be hard to pinpoint – so here’s what to consider when it comes to choosing the ideal policy.

What does home insurance cover?

Home insurance is a broad term that’s used to describe two different types of cover:

Buildings insurance covers the cost of repairing damage to the structure and fixtures and fittings of your home such as doors, bathroom suites and kitchen cupboards.

Contents insurance covers the cost of any damage to your possessions such as furniture, electrical goods, clothes and books. The simplest way to think of ‘contents’ is that it includes anything you could take with you if you moved.

Insurance providers sometimes offer discounts if you buy combined buildings and contents cover, but you may choose to opt for separate policies with two different insurers – it’s entirely up to you.

Home insurance is not a legal requirement but if you have a mortgage, then your lender will usually require you to at least take out buildings insurance.

What types of home insurance policies are there?

All good standard policies should protect your home against fire, flood, storm damage, subsidence and theft.

For even greater peace of mind, you can add on extra cover, for example, accidental damage insurance or new for old cover which replaces damaged items with brand new ones.

If your home is a listed building or it’s made with unusual building materials such as thatch, granite, timber or a ‘local stone’, a policy designed for ‘non-standard’ homes may be more suitable.

These policies tend to be more expensive compared to those for ‘standard’ homes because they consider the age of the house and the specialist materials and labour needed to repair the property.

If you rent out a property, then it’s worth considering landlord insurance as these policies cover a range of scenarios that only apply to rentals – such as landlord liability, unoccupied property and loss of rent cover.

How much is home insurance?

When it comes to working out the cost of your policy, insurance providers take into account several different factors, such as:

    Rebuild cost – this is the most important element in determining the cost of buildings insurance but it’s not the same as your home’s market value – it is how much it would cost to build your home from scratch. Although this may seem drastic, fire can cause irreparable damage.

    If your home is listed or of non-standard construction, then it’s best to ask a surveyor to value your home, otherwise you can use the Association of British Insurers’ (ABI) rebuild calculator to get an idea of cost.

    The value of your contents – to work out the amount of cover you would need to replace all your belongings, it’s wise to go through your home room by room. As well as the big things like furniture, white goods, all your personal possessions and clothes, don’t forget the little details that make a house your home including pictures, rugs, cushions and curtains.
    Your claim history – the more claims you make, the more likely your premiums are to rise, so it’s a good idea to think carefully before making any smaller claims.

    Location – your home’s location has an impact on the cost of insurance not only in terms of crime rates, but also if there’s a risk of subsidence or flood.

    Additional extras – if you’ve chosen to add on extra features, then this will increase the cost of your premium.

Do I have home insurance?

If you’ve forgotten who you’re insured with or don’t know if you have home insurance, then you could try contacting your mortgage lender (if you have one) as they may have the details of your provider. Alternatively, you could check bank statements, direct debits or old emails.

How to change home insurance provider

Comparing and switching your home insurance provider has never been easier. When your policy comes up for renewal, just use our online comparison tool, answer a few simple questions about the cover you’re looking for and we’ll help find the right policy for you.

Alternatively, if you’d prefer to get a quote over the phone please call 0330 022 4684 and one of the team will be happy help.

Can I have two home insurance policies?

Technically, yes you can have two home insurance policies (for instance if you’d forgotten about a policy and subsequently bought another) but that doesn’t mean you can claim for twice the amount of money.

It’s best to avoid duplicating insurance. Not only are you paying for something twice, but doubling up can slow down a claim. The only exception is life insurance where you may have a number of policies that cover different situations – like repaying your mortgage or meeting funeral costs.

How long does it take to make a home insurance claim?

The short answer is, it depends on the circumstances of your claim. Minor claims can be settled in just a couple of days, while larger claims that involve a more detailed assessment of the situation will take longer.

If you need to make a claim on your home insurance, the first thing you’ll need to do, is contact your provider – have your policy number handy and crime number if you’ve been burgled.

Your insurer will take some details and let you know what to do next – in most cases you’ll need to fill in some forms and send them back to get the ball rolling.

The more details you can provide – for example, photos of damage or of items that were stolen, the quicker your claim is likely to be resolved.

If the damage you’re claiming for is more serious (for example, a tree falling through the roof or you’ve been flooded) then your insurance provider is likely to send a loss adjustor to assess the damage in order to calculate the cost of repairs.

What does excess mean in home insurance?

The excess is the amount of money you need to pay if you make a claim – there are two types of excess:

• Compulsory excess is an amount set by the insurer

• Voluntary excess is an amount you agree to, if you chose to add this when you take out a policy

For example, if you made a claim for £1,000 but your compulsory and voluntary excess added up to £200, your insurer would pay out £800.

Insurance providers should always make it clear what the compulsory excess is when you sign up to a policy and it’s wise to compare as some can be as little as £50.

With voluntary excess – the higher it is, the lower your premium is likely to be but don’t be tempted to set an unrealistically high excess in order to lower the overall cost of your policy because if you make a claim, you’ll need to pay it, in order to proceed.

Is your mobile phone covered on home insurance?

Most home contents policies will cover your phone for the same insurable events as your other belongings – such as if it was damaged by flood or fire, or if it was stolen from your home. If you want to protect your phone against other situations such as accidental damage, then you’ll need to ensure you have this included in your cover.

Similarly, if you want to cover your phone while you’re out and about, you may need to consider adding a ‘personal possessions’ extension to your contents policy, which will safeguard against damage, theft and loss when you’re away from home.

One other factor to bear in mind, is the cost of your phone – if you have a particularly expensive, or customised model then check that your policy will compensate you with enough money to buy a replacement.

You’ll also need to consider whether making a claim for your mobile is worth paying the excess and be prepared for a rise in your next premium if you do claim.

What is home warranty insurance?

In the UK, a home warranty policy is also known as a building warranty – they typically only apply to new build homes and act as a promise that if anything goes wrong with your home, it will be put right by the builder. The warranty is normally taken out by the builder or the developer.

Most building warranties last for ten years – the main provider of warranties is the National House Building Council (NHBC) who issue around 80% of them.

Building warranties are specific in what they cover so it’s best to familiarise yourself with your policy – typically you’ll have:

Protection against the builder becoming insolvent – if you buy a new build before it’s built then your warranty will ensure you get your deposit back if the builder fails to construct your home.

A defects insurance period – this usually applies to the first couple of years only and covers defects such as poor installation – such as leaking windows.

A structural insurance period – this covers any fundamental problems with the structure such as with walls, foundations, chimney and roof.

Building warranties apply to the specific building they cover so if you move, the warranty is transferred to the new owner.

What’s the right home insurance for me and how do I find cheap quotes?

The right policy for you will be the one that meets your needs and your budget – which is why it’s really important to compare what’s on offer and when you do compare, it’s best not to assume that all providers have the same levels of cover, or service.

What’s ‘included as standard’ with one provider may not be the same as another so double check the policy wording to avoid any nasty surprises further along the line.

It’s worth remembering that basic policies that start off competitively priced might actually end up more expensive once you’ve added on extra features like accidental damage cover or personal possessions. In contrast, some initially higher cost plans may already include this as standard.

So, if you’re looking for a quote or it’s time to renew your existing cover, remember you can search for a new policy right here.

Alternatively, if you’d prefer to get a quote over the phone please call 0330 022 4684 and one of the team will be happy to help.

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