Home insurance: what you need to know

family homes

We know from the many, many discussions on Talk that Mumsnetters are assiduous when it comes to seeking out a bargain. Yet sometimes the bigger the ticket price, the less we haggle. How many times have you searched out a free delivery code for a £10 top but renewed your home insurance without thinking?

One issue is the boggling range of different policies and providers out there – making the decision to use an insurance comparison site a pretty savvy time-saving one.

Home insurance: what type do I need?
There are three main types of home insurance:

Buildings insurance
A policy covering the actual structure and permanent fixtures of your property

Contents insurance
A policy covering the valuables and goods inside your home

Combined home insurance
A policy covering both the structure of and valuables inside your home

In order to get the best deal, you need, first of all, to know which of these you’re after and what specific requirements you might have that will make a policy more or less suitable for you.

Contents Insurance:

If you want to protect all the valuables in your life (kids and OH excepted) – you need contents insurance. Having it ensures that you don’t end up having to spend your hard-earned cash replacing your stuff if it gets stolen or damaged. A good policy will cover your electronics, furniture, carpets, clothes and in some cases even your garden furniture. There’s usually also an option to cover items you take outside your home – mobiles, cameras, laptops and so on. And if you have a house full of rampaging kids, accidental damage might be a good idea too.
Be warned though, if you have some high value items in your home you may need to pay an additional premium to have them covered.

The most important thing to remember is not to under-insure your contents. If you’re insured for £5,000 but the real value of your chattels is £10,000, it doesn’t take a calculator to realise you’ll be £5K down if the worst should happen.

All of the little things really add up (hands up if you’re in serious denial about how much we’ve spent on bits and bobs over the years) – so make sure you tot up everything from the clothes in your wardrobe to the art on your walls. Lots of sites have a handy calculator to help you accurately assess the combined value of what’s in your home.

With contents insurance, you will probably need to pay an excess – the amount of money the insurance company expect you to pay towards a claim. If £500 worth of your stuff is damaged or stolen and you have an excess of £200, your insurer will only pay out £300. Playing with the excess is one way to drive down your annual premium, so give serious consideration to what you’d be prepared to pay towards a claim and use a comparison website to see how much you save overall.

Buildings insurance:

The purpose of buildings insurance is very different from contents insurance. It aims to cover the actual structure and permanent fixtures of your property, but not the contents. If you are not a homeowner you don’t need buildings insurance as this will be covered by your landlord. If you live in a flat, buildings insurance is often included as part of your service charge, but do check – it’s never a good idea to presume with this stuff!

In most cases, buildings insurance will be a mandatory requirement in getting a mortgage. That’s not surprising – the consequences could be pretty catastrophic if (say) your property burned down and you found yourself having to pay to rebuild it, while STILL owing the mortgage company what they’d lent you.

Some of the better policies will cover garages and garden sheds but do check your coverage before signing the dotted line. Extensions and larger interior changes are not automatically included in your policy so make sure you get in contact with your provider if you are making any changes to your home.

One of the most common mistakes homeowners make with building insurance is not having the right type of cover. The important thing to have insured is the rebuild value of the property – this is the cost of rebuilding your property if it was knocked down or destroyed. A policy with rebuild value built in should cover the cost of materials and labour – and don’t forget to include the costs of where you and your family stay while your home is rebuilt. Many price comparison websites will include the rebuild cost as part of the quote but always check just in case.

Combined insurance:

Combined home insurance policies do what they say on the tin – bringing both buildings and contents insurance together in one package. If you want to keep things simple and put all of your home insurance on the same policy, this is the right insurance for you. Combining both policies with the same provider can also prove a little cheaper too. Renters don’t have to worry about building insurance so you won’t have to pay any attention to combined insurance policies.

Who’s the best home insurance provider?

If you asked this question on the Mumsnet talk boards you’d be given a whole host of different answers. The short answer is that it depends completely on you and your needs. There are an almost infinite number of variables – from your postcode to how you want to pay your premium – which change the cost of and extent of a given policy. And that’s before you factor in the hundreds of insurance providers out there.

If you want to make sure you are getting the best deal, certainly one good way to do that would be to use a insurance price comparison website. Based on Go Compare data 25% of their customers saved up to £123 on their building and content insurance renewal price*. Even if you are happy with your current policy, it can’t hurt to do a little shopping around as insurers are notorious for steadily increasing their annual premiums. Have a look and see how much you could save.

*Based on GoCompare data 25% of their customers saved up to £123 on their building and content insurance renewal price (01 Jan 2017 – 31 March 2017).