What is home insurance?

Home insurance provides a safeguard against loss or damage to your home and its contents, and typically provides indemnity against liabilities you may bear as the property owner.

Do I have to have home insurance?

There is no legal requirement for you to have home insurance – whether for protection against loss or damage to the building and its contents or for indemnity against your liabilities as a home owner.

If you are buying your home with the help of a mortgage, however, the lender is almost certain to insist that you have adequate buildings insurance – to safeguard the mortgage company’s security on the loan being advanced. It is important to remember that this element of home insurance meets the relatively restricted interests of the mortgage company and the protection of the outstanding amount of the mortgage loan only.

How many people have home insurance?

According to statistics compiled by the Association of British Insurers (ABI), just over 20 million of the nation’s 26 million households have contents insurance and 17 million have building insurance. At least part of this difference is accounted for by the fact that property owners may need both building and contents insurance, whilst tenants generally need only contents insurance.

How can I buy home insurance?

There is no shortage of companies offering home insurance packages. Indeed, the choice is likely to be overwhelming.

It is important, therefore, to choose the cover that suits your particular needs and circumstances, providing sufficient cover for your individual requirements, without the inclusion of elements you might not need yet still have to pay for.

To guide you through this maze of possible choices, you might want to consult a specialist provider of home insurance.

What’s covered?

The huge range of different home insurance packages available means a wide variety of both the scope and nature of the cover provided. Typically, however, there are three core elements:

Building insurance

• this is designed to protect the structure and fabric of your property against major risks such as flooding, storm damage, fire, impacts (from falling objects or vehicles, for instance), vandalism and theft;

• the total building sum insured typically anticipates a worst case scenario in which some insured incident results in the complete destruction of the property and any insurance settlement needs to cover the cost of rebuilding;

Contents insurance

• just as the term suggests, this provides protection against a similar range of risks resulting in the loss or damage of the contents of your home – as with building insurance, protection against accidental damage might also be included as an optional extra;

• typically, you may choose between contents insurance which provides new for old replacement of lost, stolen or damaged items or the settlement of claims which reflects the normal wear and tear of that item – the former level of cover is naturally likely to be more expensive than the latter;

Property owner’s liability

• as the owner of the property, you owe a duty of care to any of your visitors, neighbours and members of the public;

• if any of these individuals suffers an injury or has their property damaged in some way connected with your own property, you may be held liable and order to pay substantial damages;

• given the potential scale of such claims, many home insurance packages include a minimum of £1 million indemnity cover.