Insuring your first home
Have you saved money, found the right property, had the mortgage agreed, and have a hopeful exchange date on the calendar? If so, it could be the time to think about first-time home-buyer insurance. Here, MoneySuperMarket breaks down exactly what you need to know.
Key takeaways
Buildings insurance covers the physical structure of your home (walls, roofs, windows), whereas contents insurance covers movable items within the home (clothes, electronics, furniture)
You should have buildings insurance in place when exchanging contracts – your mortgage lender may insist you have cover
Contents insurance is optional but ideally should be active when you start moving belongings into your new home
You need buildings insurance even if you buy a new build covered by a warranty
should check the insurance arrangements for their block of flats
Home insurance for first-time homeowners
Home insurance is split into two parts:
Buildings insurance protects the physical structure of your home, including walls, roofs, and windows.
Contents insurance covers movable items within the home, such as clothes, electronics, and furniture.
You can buy separate buildings and contents insurance policies, or a joint policy covering both.
Policies can vary significantly between insurers, so always check the terms and conditions thoroughly.
Do you need buildings insurance?
Buildings insurance is not usually mandatory, but it is a good idea.
If you've previously been renting, buildings insurance would have been your landlord’s responsibility. Now you’re a homeowner it’s your responsibility. Most mortgage lenders will insist you have buildings insurance.
If you buy a leasehold flat or one with share-of-freehold, buildings insurance will usually be arranged by the freeholder or managing agent and cover the block as a whole. Costs will be divided between flat owners and normally paid as part of the service charge.
Where should I buy first-time home-buyer insurance?
You are not obliged to buy buildings insurance directly from your mortgage lender. It’s best to compare policies and premiums online.
Homeowners have the freedom to shop around for both buildings and contents insurance.
You can compare home insurance policies with Moneysupermarket.
When should I buy home insurance?
You should have buildings insurance in place at the time of exchanging contracts with the property seller.
As for contents insurance, it's wise to have it active from the moment you start moving your belongings into your new home.
When it comes to moving day, most policies cover your belongings during transit, this is typically only the case if they are moved by a professional company and under certain conditions.
How much should I insure my home for?
For buildings insurance, you'll need to know the rebuild value of your home, which is the cost to rebuild the property from scratch in the event of total destruction.
This figure will be different from the purchase price of your home.
For contents insurance, you should base the cover limit on the replacement cost of each item, not its depreciated value. Most contents policies offer cover for £40,000 or so of contents, or unlimited cover.
What does home insurance cost?
The cost of home insurance varies depending on factors including:
Your location
The total sum insured
Potential flood risk
Crime statistics
To reduce the cost of home insurance you could:
Bundle your buildings and contents policies
Buy your policy online
Pay annually instead of monthly
Agree to a higher excess
What exclusions does home insurance typically have?
Home insurance has a number of common exclusions such as:
Insurance typically doesn't cover gradual damage such as damp or rust.
For unexpected issues, you might need to add extra coverage.
If you forget to lock your doors and an incident occurs, it's unlikely to be covered.
Many policies exclude damage caused by pets.
Wear and tear:
Accidental damage:
Negligence:
Pet damage:
Do I need buildings insurance on a new build?
Even though new builds should come with a warranty, mortgage lenders usually require buildings insurance to be in place.
Warranties cover specific issues but are not comprehensive, so having insurance is still recommended.
Compare first-time homebuyer insurance with MoneySuperMarket
As a first-time homeowner, it's essential to find a home insurance policy that provides the right level of protection at an affordable price.
MoneySuperMarket is a valuable resource that allows you to compare home insurance policies quickly and easily. With the ability to find tailored quotes, you can ensure that you're not paying more than necessary for your cover.
Additionally, MoneySuperMarket offers a mortgage comparison tool, helping you to explore and compare mortgage deals that best fit your financial situation.
Please note that failure to keep up with mortgage repayments can result in the repossession of your home.
