What type of home insurance do I need?
There are two types of home insurance: buildings insurance and contents insurance.
Buildings insurance isn’t compulsory for homeowners but it’s advisable and most mortgage lenders will insist you’re covered. If you’re buying a flat, buildings insurance will normally be arranged by the freeholder.
If you’re renting a home, you won’t need buildings insurance (that’s the landlord’s responsibility).
Contents insurance isn’t compulsory either but it’s a good idea for both tenants and owner-occupiers to protect their belongings.
Moving house - when should I arrange home insurance?
If you are buying a property, ensure buildings insurance is bought by the time you exchange contracts with the seller (the ‘date of acceptance’ in Scotland) rather than completion day when you get the keys.
The easiest way to ensure you’re covered is transferring an existing policy to protect the new property. If buying, speak to your buildings insurance company about transferring cover to your new home ready for exchange.
An overlap in dates (i.e. between exchange and completion) should be allowed for in your buildings insurance policy. It’s rare for a purchase to fall though after contracts have been exchanged, but if this happens you can cancel the transfer of cover.
Both homeowners and tenants should contact their contents insurance provider well ahead of a move and arrange for cover to be transferred to their new address on the day of the move.
To do this you'll need to provide your insurer with details of your new home. Premiums are based on the postcode and the type of property, as well as the value of your belongings, so your insurer will recalculate your premium accordingly. There may be an administration charge for amending your policy.
How much cover do you need?
When you buy buildings insurance you need to provide the insurer with your property’s rebuild cost as the basis for the sum insured – literally the amount it would cost to build the house again if it fell down. The rebuild cost may be significantly different from the market value.
The rebuild cost can usually be found in your survey or mortgage lender's valuation. Alternatively, you can check it online using the calculator on the Association of British Insurers website
When it comes to contents insurance, moving house is a good time to review the sum insured, especially if you’re buying new furniture or electrical goods for your new home.
Goods in transit cover
You’ll need ‘goods in transit’ insurance to cover your belongings while they are in transit from one home to the next.
This kind of cover usually comes with several important terms and conditions:
- The move must be carried out by a professional removals firm.
- Any delicate or breakable items must be packed by a professional firm.
- Some valuables such as jewellery and documents might be excluded.
Most contents insurance policies will include goods in transit cover as standard, while others will offer the cover as an add-on.
Your removals company might also offer goods in transit insurance. Even if you have home insurance, this can be a shrewd option as a claim on your contents insurance could cause your premium to increase the following year.
Some contents policies include cover if you need to put your belongings in storage – but this might only be for a couple of days so check your policy terms and conditions.
International moves
If you’re moving overseas, you’ll need insurance specifically designed to cover your goods during international shipping. ‘Shipping’ doesn’t necessarily mean by sea; it includes transit by air and land too.
Many international removals companies will offer insurance as an add-on but you can also buy a separate policy. A good policy will cover your belongings while they are in transit, while they are being loaded and unloaded from each mode of transport, and if they are in storage at any point in the journey.
Insurance for a new build property
Some people moving into new build properties have reported difficulties taking out insurance as insurers don’t recognise their postcode. The issue appears to stem from administrative delays getting new postcodes generated by the Royal Mail onto insurers' databases.
New postcodes ‘go live’ when the Royal Mail is informed mail can be delivered to the new address. This process is usually triggered by a phone call from the new property owner or house builder. How long postcodes take to show up on insurers’ databases depends on how often they synchronise them with the Royal Mail.
To reduce your chances of having problems, start the process of registering your new address as early as possible.
Why you should run a quote to compare prices
Moving house is a good time to obtain quotes for both buildings and contents insurance, or for a joint buildings and contents policy.
Insurers look at your postcode and the risk level associated with it so you may find cover more expensive or cheaper than previously.
Be aware that most insurers charge a cancellation fee if you cancel your policy mid-term so weigh up whether it’s still worth switching once you’ve paid this fee.
Home movers’ hub
If you need more advice about moving home, visit our home movers’ hub. It provides tips about finding your new home, moving day, and settling into your new home.