Home Insurance

Buildings

The structure itself. Walls, roof, floors, fitted kitchens and bathrooms, and normally garages, outbuildings, walls, gates, fences and driveways. If you turned the house upside down, buildings cover is broadly what would not fall out.

Contents

What would fall out: furniture, clothes, electronics, carpets, curtains, jewellery and the contents of the freezer.

If you own your home you generally need both. If you rent, you need contents only, since the structure is the landlord’s responsibility. If you own a flat, the building is very often insured by the freeholder through a block policy, so you insure contents and check whether internal fixtures fall to you. Paying twice for buildings cover on a leasehold flat is common and avoidable.

The buildings sum insured is the cost of demolishing what is there and rebuilding it, including professional fees, site clearance and current building regulations. It is not the market value and not what you paid. Across much of Somerset the rebuild figure is lower than the market value, because much of the price is the land, and land does not burn down.

Guessing is the problem. Building costs have risen sharply, so a figure set five or ten years ago is often well short. The Building Cost Information Service publishes a free calculator that suits most standard houses. Thatch, cob, stone, timber frame, a listed building or anything pre-Victorian will not be rebuilt at standard rates, and a listed property must be restored with matching materials, which costs considerably more. Those homes usually need a specialist insurer rather than a comparison site.

This applies to partial claims, not just total losses. Most policies contain a condition of average. Insure for less than the true value and the insurer can cut any settlement by the same proportion. Insure a house for £200,000 when the rebuild cost is £400,000 and you have covered half the risk, so a £60,000 fire claim can be settled at £30,000. You do not have to lose the whole house to lose money.

The same applies to contents. Walk each room and add up replacement as new, including what nobody counts: books, kitchenware, tools, bikes, garden equipment, clothing. Most households come out well above their guess. Some insurers now offer a bedroom rated or unlimited contents sum, which removes the arithmetic, though individual item limits still apply.

Standard policies cover named events such as fire, theft and storm. They do not automatically cover a foot through the ceiling from the loft, paint spilt across a carpet, or a controller through the television screen.

Accidental damage is normally an optional extra and can be added to buildings, contents or both. On buildings it covers things like a drill through a hidden pipe or a cracked bath. On contents it covers the everyday breakages. It costs little and it is the extension people most often wish they had bought, particularly with young children, pets or wooden floors.

Contents policies apply a single article limit, often between £1,500 and £2,500. Anything worth more has to be listed on the schedule or it is only covered to that limit. An engagement ring valued at £8,000 sitting inside a general contents sum is not fully insured. There is usually an overall valuables limit too, covering jewellery, watches, art and collections as a percentage of the contents sum.

Cover away from home is separate again. Personal possessions cover, sometimes called all risks, insures what you take out with you, and bicycles above a certain value normally have to be specified. Have valuables revalued every few years, since gold and second hand watch prices have moved a long way.

• Leaving the property unoccupied beyond the period stated in the policy, commonly thirty, forty five or sixty days, after which cover can be cut right back.
• Not telling the insurer about a change: a lodger, a business run from home with customers visiting, a loft conversion, solar panels, or letting the property out.
• Undeclared previous claims, subsidence history or flooding at the address.
• Security requirements written into the schedule, such as specific locks, that were never fitted.
• Assuming flood cover is automatic. Many homes in flood risk areas are supported by the Flood Re scheme, but eligibility has rules and properties built after 2009 are excluded.

Tell the insurer when something changes. It usually costs nothing and it keeps the policy answering when you need it.