Protecting your home and ensuring that it’s safe against damage or theft is critically important. And one of the best ways to do this is with insurance. But what is contents insurance and how does it differ from buildings cover?
A buildings insurance policy protects the structure of your home, from the walls and the windows to the roof and the permanent fittings within, such as kitchens and bathrooms. With this type of insurance, you’ll have cover if anything causes damage to your home or your property needs to be rebuilt due to a fire, flood or collision. Contents insurance protects your personal possessions, from furniture and TVs to clothing, flooring and even soft furnishings such as curtains.
These insurance policies can be purchased separately or together, but they provide homeowners with peace of mind that their homes are protected. With properties costing so much to buy and furnish, finding the money to repair or replace any aspect of them can be costly. Insurance makes sure that you can keep these costs down and that you don’t have to worry about unforeseen events leaving you struggling financially.
In our buildings and contents insurance guide, we answer many of the common questions around this topic, such as what is contents insurance cover, how much does this type of insurance cost and what is excess? The information in this guide can help you make the right choice when choosing an insurance provider and a policy that offers the right level of cover for your home.
With more people working from home than ever, where you work and what you do for a living could affect your buildings and contents cover. We highlight the things to consider if the pandemic has resulted in you working from your home and when you may need to tell your insurer.
How does buildings insurance work and why is it a beneficial product to have to protect your property? In this section of our contents insurance guide, we explain what this insurance policy provides.
From location to the size and type of property you own, there are several factors to consider which can impact the cost of buildings and contents insurance. We highlight a few of these variables and the average costs.
Buildings and contents insurance typically covers a few variables as standard, but there is the option to tailor your policy to suit your needs. We explain what is usually involved with standard buildings and contents cover, and what added extras you can purchase.
When it comes to how to get contents insurance or buildings insurance with a mortgage, there are a few things to consider, from the type of property you’re buying and whether to choose the policy your mortgage provider offers. We explain in detail during this section of the guide to help you make the right choice.
Choosing the right policy and the correct amount of cover can be difficult, not just for buildings insurance but also for your belongings as well. In this section of the guide, we explain what to consider when choosing the level of cover you need.
When it comes to your home, insurances and warranties are two very different products. We explain the difference and which to choose in certain circumstances to help you make the right decision for your needs.
The type of excess and how much you’ll have to pay depends on the insurance policy and what you’re making a claim for. In this section of our buildings and contents insurance guide, we explain what excess is and how much you could expect to pay.
If you’re moving home, you’ll be legally responsible for both properties from the date you exchange contracts. So can you move your existing policy to a new address? We explain how transferring a policy works and what to consider when moving your insurance.
There are many benefits to purchasing insurance for your home and belongings, from peace of mind that you won’t have to find the money for costly repairs, to added benefits to certain policies like legal assistance. In the final section of our contents insurance guide, we highlight some of the benefits to this type of cover.
Getting Buildings and Contents Insurance during Coronavirus
Many people have had to switch to remote working as a result of COVID-19, which could have some implications for your buildings insurance. If your work is clerical, you should be protected by your standard home insurance, and any equipment supplied by your employer will be covered by their business insurance. If you normally work from another location but you’re now working remotely as a result of coronavirus, you don’t need to tell your insurer.
But if your job involves other types of work, you should contact your insurer to check that you’re still covered. Similarly, if you’ve purchased new furniture or equipment in order to work from home, you may have to increase your contents cover limit to protect the new products. If you are running your own business from home and now storing stock or products there as a result of the pandemic, you should inform your insurer.
Being at home more can mean a greater risk of accidents occuring in the property, so if you feel that you might benefit from added protection, you can contact your insurer to add accidental damage cover to your policy for an additional fee.
Another concern that people have as a result of COVID-19 is that there is typically a limit on the number of days a property can be left unoccupied and still remain with cover. However, the pandemic has meant that living arrangements for some people have been altered. The government guidance on this issue is that insurers need to assess each case pragmatically, and those who can’t return to their home within the timescales detailed in their policies as a result of the pandemic should not be affected.
The good news is that buildings and contents insurance policies can still be purchased. With so many of us spending time at home, as well as dealing with financial difficulties as a result of being furloughed or losing work due to COVID-19, it’s never been more vital to have buildings and contents insurance in place to protect against expensive repairs or loss.
1: What is Buildings Insurance?
There are various types of insurance products you can buy for peace of mind, but what is buildings insurance and why should you consider it for your home? Buildings insurance protects you against the cost of repairing damage to your property, and, depending on your policy, it can also include sheds, garages or fences.
This type of insurance is also designed to cover the full cost of rebuilding your house, including demolition, site clearance and architects’ fees. There are various types of damage that might affect your property, including:
- Storms, fires, floods or earthquakes
- Theft or attempted theft
- Burst pipes
- Fallen trees, lampposts, aerials or satellite dishes
- Collisions from vehicles
Buildings insurance can also be combined with contents insurance to protect your belongings inside the property from loss, theft or damage too. You can buy these policies together or separately, depending on your needs.
It’s important to note that if you’re the owner of a property that you rent out, landlord insurance will only cover the items that you own and furnish the property with. If you’re a tenant renting a property, you won’t need to worry about buildings insurance but a contents insurance policy can be beneficial to protect your own belongings from damage or theft.
2: How much is Buildings and Contents Insurance cover?
A common question is ‘how much does buildings and contents insurance cost?’. There are several variables to consider when answering this question. Premiums, where you live and the type of property you own, as well as the number of bedrooms in the property can all impact how much buildings and contents insurance costs. Even local crime rates, the building materials used to build your home and whether there’s a history of flooding in your area can have an effect.
The number of rooms is a good benchmark for determining an average cost for buildings and contents insurance. A one-bedroom property, for example, typically costs in the region of £95 per year; a three-bedroom property can cost around £106 per year, while a six-bedroom property costs over £280 per year.
If you’re unsure about the type of policy you need, it can be beneficial to speak to an insurance specialist who can go over the different options and help you find the right level of cover for your home. With access to the whole insurance market and an in-depth knowledge of different providers, they’re well equipped to help you find an amount of cover that you’re comfortable with and can afford.
3: What does Buildings and Contents Insurance cover?
In order to choose the right level of cover, it’s important to know what is included in buildings and contents insurance. As standard, buildings insurance protects the physical structure of your property, including the permanent fixtures within, such as your kitchen or bathroom suite.
Buildings insurance protects the fitted features of your home, including:
- Doors and windows
- Fitted kitchens
- Bathroom suites
- Built-in cupboards and storage
Garages, sheds and gazebos are also covered in many cases, although this depends on the individual providers. Fences, gates and boundary walls aren’t usually included but check the terms of the policy before purchasing to make sure.
When it comes to what’s covered, buildings content insurance can be tailored to suit your needs, as there are add-ons that you can include in your policy for your specific circumstances. For example, you may want to cover outbuildings on your land, swimming pools or ponds, patios and gardens. Similarly, you may want to add cover for alternative accommodation if your property has to undergo significant repairs.
If you live in an area where subsidence is a risk, such as a location with a high clay content, your insurance provider might ask for an excess. Similarly, there are around 2 million properties in the UK that are more at risk of flooding, and living in a flood risk zone can affect your insurance.
It’s always important to provide full disclosure when applying for insurance, as any false or withheld information could invalidate your policy. You don’t want to find that your claim is rejected and you’re out of pocket simply because you didn’t inform your insurance provider of certain details.
So, what’s not covered by buildings and contents insurance? As with any insurance policy, there are always exclusions – and buildings and contents insurance is no exception. The specifics of what is and isn’t covered will vary depending on the policy, but with contents cover, it’s likely that wear and tear, or damage to your computer due to a virus, for example, won’t be covered.
Contents cover for valuables typically comprises a single item limit or a total amount for all of your valuables. Many contents insurance policies have a single item limit of £1,500. So, if you have items like expensive works of art or jewellery that are more costly, it may be worth taking out extra cover to protect these possessions.
Common exclusions for buildings insurance include:
- Wear and tear
- Damage caused by neglect to the property
- Poor workmanship
- Weather damage to fencing or gates, such as from storms
- Frost damage to pipes and brickwork
- Damage caused by birds, insects or pests
Other issues, such as a leaky roof, can depend on the circumstances of how the roof came to be damaged. A leak due to a storm raising tiles and causing damage may be covered, but a leak caused by the age of the roof or wear and tear wouldn’t be.
Likewise, if your home needs underpinning as a result of damage to the exterior, such as because of subsidence, this should be covered by your policy, but if it’s just to change the structure of the building, such as adding an extension, this would not be covered.
You should always do your research when choosing a policy and make sure that you fully understand the terms and conditions in order to know what you can and cannot claim for.
4: How to get Building and Contents Insurance cover for a mortgage
You may wonder if you need buildings and content cover for mortgage loans. While it’s not a legal requirement, it may be a condition of the mortgage being accepted depending on the loan itself or the mortgage provider. There are certainly benefits to taking out a policy. In fact, it could end up saving you money in the long run.
When it comes to how to get buildings and contents insurance, many people believe they have to get their policy through their mortgage provider. This used to be the case, but the rules have changed in recent years and you can now choose your own alternative provider if you wish.
Your mortgage provider may offer buildings insurance as part of their mortgage package, but you’re not obligated to use their policy if you can find a better deal elsewhere. Your mortgage broker may also recommend an insurance provider or they can help you find the right insurer for your needs.
Many home buyers believe that they don’t need to worry about buildings and contents insurance until they’ve completed their purchase, but this isn’t actually correct. You need to have buildings insurance in place from the date the contracts are exchanged, as this is when the property becomes the legal responsibility of the buyer. This means that you’ll need details on the property you’re buying such as the address, when it was built, the materials it’s made from and whether there are smoke alarms installed.
When you’re researching how to get buildings insurance on your property, you may find that it’s difficult to get cover for properties that are not made from standard construction. For example, if your property is a:
- Listed building
- Property with a flat roof
- Property with a thatched roof
- Timber-framed or timber-clad property
- Flat in a concrete-built block or with more than 5 floors
In these instances, a standard buildings insurance policy won’t cover you, but there are still insurance providers who will insure a non-standard property in these cases.
5: How much cover will I need?
It’s important to get the right level of insurance for your needs, which prompts the question: how much contents insurance should I have? When you’re choosing a policy, you need to make sure that you’re insured for the cost of completely rebuilding your home. This is known as the sum insured but it’s not necessarily the price you paid for the property or its current value. The cost to rebuild is usually less than the current market value, so it’s a fine balance between over and under-insuring yourself.
Some insurers will offer unlimited cover, so assessing what the rebuild costs might be won’t be necessary, but if you can gauge the figure, it could work out cheaper to find a policy that meets your needs. An insurance professional can help with this, to help you find a policy that fits your budget and your insurance requirements if you’re unsure where to start.
Since rebuild costs increase each year, it’s a good idea to regularly review how much your buildings insurance will cover. Similarly, as you make improvements to your property, the rebuild costs will rise in line with this. Many insurers offer policies that increase in line with these rising rebuild costs, but it’s not a given, so make sure you check with your provider.
When you’ve assessed your buildings insurance needs, the next question is often ‘how much contents cover do I need?’. There are 3 types of policy to choose from:
- Bedroom rated – With this policy, your insurance provider assesses the amount of contents cover needed based on the number of bedrooms you have. Typically, this type of policy covers you up to £40,000-£50,000 as standard. For most properties, this is a sufficient amount but always check your own personal needs when taking out a policy.
- Sum insured requires you to calculate the amount of cover needed yourself.
- Unlimited sum insured – With this policy, all of your possessions are covered without a price limit, so there’s no risk of you under-insuring yourself.
6: Difference between Buildings and Contents cover vs warranties
Warranty and insurance are both terms for some level of protection for the people who buy them. How do you know whether buildings insurance or warranty is the best option for your home? There is a distinct difference between the two when it comes to your home and it is vital that you know the difference so you can choose the right option.
A warranty is an insurance that covers the repairs or replacement of appliances and systems in your home if they stop working due to wear and tear. It may be for washing machines, dryers, ovens, hot water heaters and other fixtures of your home. Individual appliances might be covered by the manufacturers’ warranty for that specific item, but they are only for a set period of time – usually 1 or 2 years. A home warranty, however, provides protection no matter the age of the appliance in question.
There are warranties for new build developments too, such as the National House Building Council or NHBC warranty which is a recognised provider of warranties and insurances for new homes. They provide builder warranties that offer protection against defects or damage that are a result of the building work, to provide peace of mind that the property is built to the correct standards. If your builder is registered with the NHBC, your home should be automatically covered by their 10-year warranty, known as Buildmark. For the first 2 years, the builder is liable to put right any problems or defects that are the result of poor workmanship.
If you choose to sell your new build home within 10 years, the remaining cover can be transferred to the new owners and this can serve as a positive selling point when you’re on the market. It’s important to note, however, that Buildmark differs from typical warranties in that it doesn’t protect against wear and tear. It also doesn’t offer cover against the elements or accidental damage, which is where having buildings insurance is beneficial.
Contents insurance is a policy that pays out if you’re a victim of theft or damage from outside forces, such as from burglary, vandalism, the weather or a fire. If any of these events causes damage to your belongings, your insurance policy would cover the cost of rebuilding or replacing your property. If a flood occurs, for example, and causes damage to your kitchen, your insurance would cover the replacement of your appliances. But if the same appliance stopped working due to wear and tear, your insurance wouldn’t cover this.
When it comes to contents insurance or warranty, the former covers you against unexpected events while a warranty covers events that are to be expected, such as the eventual breakdown of appliances. However, in the case of a new build property, it can be helpful to have both forms of cover to fill in any areas that your Buildmark warranty doesn’t cover.
7: What is excess in insurance?
The term ‘excess’ comes up a lot when researching insurance policies, but what is insurance excess? On home insurance policies, excess is the amount you would pay towards a claim before the insurance provider pays out. There are two types of excess:
- Compulsory excess is the amount set by your insurance provider. Most policies have a compulsory excess.
- Voluntary excess is an amount agreed between you and your insurance provider when you buy cover. There is often the option to pay a higher excess if you need to make a claim, which will result in a lower premium, either monthly or yearly.
If you need to make a claim, your insurer will deduct both forms of excess from however much they pay you, or you pay the total amount to whoever the repairer or supplier is, such as your builder.
The excess on buildings and contents insurance can differ considerably. For buildings cover excess, where claims are typically expensive such as for subsidence, there is usually a higher compulsory excess. Your excess on this type of policy could be in the region of £1,000, with a voluntary excess of £250, for example. This would mean paying out £1,250 to make a claim.
For contents cover excess, you may be looking at a much lower compulsory excess, such as around £50 for accidental damage, with a voluntary excess of around £250, meaning you would pay £300 in the event of a claim.
8: Can you move an existing Buildings and Content policy?
If you’re moving home rather than buying a property as a first time buyer, you may already have an insurance policy in place. So, can you move contents insurance to a new property? There’s a lot to consider when moving to a new property and while making sure your new home is insured is important, it’s unlikely to be at the top of your to-do list.
So, if you’ve got a policy on your current property, can you transfer the buildings and content insurance to your new home? Or do you have to purchase a new policy and cancel the one you have? The answer depends on who you have your insurance with and what the terms of your policy are.
Some insurance providers will allow you to transfer your buildings and content insurance to a new address, but you may face a charge for doing so. Your premiums will be based on the postcode and the type of property you’re buying, so these may change depending on where you’re moving to.
Contact your insurance provider as soon as possible to check whether you’re able to move the policy and to let them know your new address. They will need details of your new home too, such as the type of property, how many bedrooms it has and the construction of the building. They can use this information to calculate what your new premiums might be. Similarly, if you’re buying new items of furniture or appliances for your home, this can impact the cost of your contents insurance.
Bear in mind that once you exchange contracts, you’re legally responsible for your new home, even though you’re not living in it yet. This means that you need to ensure that both your current and new homes are both insured during this period of time. Many policies will cover your old home until you officially move, but this depends on the policy you have in place and your provider. If the sale does not complete for any reason, you can then cancel the transfer of your cover.
9: What are the benefits of Buildings and Contents insurance?
Your home is no doubt one of your most, if not the most, valuable asset you will ever own. It’s where you and your family are safe and secure, and it’s where all of your possessions are stored. With this in mind, it makes sense to protect it with buildings and contents insurance that will ensure your home and the belongings within it are covered against damage or theft.
There are many benefits of building insurance, such as benefitting from protection against unexpected events or disasters that would otherwise be extremely costly to repair or replace. Many mortgage providers require buildings insurance to be in place in order for the mortgage application to be accepted, as it ensures that they will be able to recover the cost if the property is damaged. But there are more reasons to choose buildings and contents cover than just your mortgage provider.
The benefits of contents insurance are that it provides an easy and efficient way of covering all of your personal belongings, from furniture and appliances to curtains, clothes and jewellery. Unlike buildings insurance, which may be a requirement of your mortgage provider, contents insurance is a personal choice. But if you were to suffer a burglary, or damage from a fire or flood, how would you afford to replace everything you own?
- With contents insurance, you can choose a new for old policy to replace your lost or damaged items with new alternatives
- Personal possessions, such as laptops, cameras or jewellery, will be covered if you lose or damage them outside of your home
- You can make use of legal helplines with some policies which will offer you advice on personal legal matters, like employment issues or tax
- There are optional extras you can purchase with your policy, like home emergency cover, which will pay for call out fees from tradespeople such as plumbers or electricians
Find out more
It can be difficult finding the right policy to protect your most valuable items and your home. Town & Country Mortgage Services can help you find the right provider. Our insurance specialists have extensive experience in the industry and access to the whole market, so we can assist you in finding the right policy for your needs. Contact us today for guidance and advice and we’ll be happy to help.