Home insurance is vital for protecting both your home and your possessions and this applies whether you're the owner of a three-bedroom home or a tenant in a rented property.
Two main types of insurance cover are available. These are often sold as a single policy, but can be taken out separately as buildings insurance and contents insurance. Although frequently presented as a single package, they are slightly different.
Buildings insurance
Buildings insurance covers the structure of the property. This includes things such as the walls of the building and any permanent fixtures inside it, such as the kitchen or bathroom. It isn't compulsory for tenants to have this for buildings that they rent because the landlord will generally be responsible for taking out the policy as the owner of the property. However, for those who have bought their own home, buildings insurance is very likely to be a condition of mortgage lending from your bank or building society.
A good buildings insurance policy will protect your home from a range of incidents, such as flooding or fire, as well as covering any damage caused by events such as falling trees, subsidence and burst pipes.
Contents insurance
This type of insurance basically covers the possessions you have in your home and items that you would take with you if you moved house. It even extends to things such as bed linen, clothes and children's toys. Because of this, you'll need to give your insurer a figure of what you believe your contents are worth and then insure them for this sum. This is known as the insured sum and it varies from anything from around £5,000 to over one million pounds for more specialist contents insurances. It's absolutely vital that you estimate the value of your possessions accurately otherwise, if you do have to put in a claim you might find yourself out of pocket.
To help work out the value of your contents, using our contents calculator, go through each room in the house and note down what's in it. Then use a mix of receipts for purchases or online prices to come up with an approximate figure of what the total contents would cost to replace. Insurers will usually state an upper limit on the value for single items, which is generally set at £1,500. Any items that are worth less than this sum won't need to be individually listed. However, items that are valued at more than this sum, such as art or jewellery, will need to be specifically mentioned.
Additional types of cover will also be available with your policy to offer additional protection. This includes things such as personal-possessions cover and accidental damage. The former covers your belongings when you are away from home; for example, if you lost your laptop or phone while you were out you could claim on your household contents cover.
Getting the best deal
To get the best insurance deal on your three bedroom house or flat, it's worth remembering that every insurance policy is slightly different.
Each will offer a varying level of cover and provide different benefits at different prices. For this reason, it's well worth shopping around for a range of quotes on the cover you want to get the best price. Make sure that you are sufficiently covering yourself, however and ideally add a safety margin to give extra peace of mind if you aren't sure about things such as your house-rebuild cost or contents value.
It's often possible to get a discount on your insurance if you buy your buildings and contents insurance policy together from the same provider. However, you should do separate price enquiries to compare. It's also possible to bring the cost of your premium down by raising the excess amount. Just make sure you'd be able to cover the excess if you did need to claim or it will be a false economy.
You can also get cheaper insurance if you make sure that your home is safe and secure by having approved locks and a burglar alarm. Being part of a local Neighbourhood Watch scheme can also help to lower your premium. Finally, if you pay for your insurance annually it will tend to be cheaper than if you pay on a monthly basis.