Home insurance is designed to provide financial protection against certain insured events that could otherwise leave you facing substantial repair or replacement costs. Depending on your circumstances, you may need buildings insurance, contents insurance or a combination of both.
Buildings insurance protects the physical structure of the property and permanent fixtures, while contents insurance is designed to protect the possessions you keep within your home.
The exact level of protection will depend on the individual policy, which is why it is important to understand what is included, the limits that apply and any circumstances where a claim may not be covered.
Home insurance is a broad term used for insurance designed to protect your property, belongings or both.
It is generally divided into two main types.
Buildings insurance relates to the structure of your home and permanent fixtures and fittings.
Contents insurance relates to possessions within the property, such as furniture, electronics, clothing and personal belongings.
You can arrange these separately or, where appropriate, as a combined buildings and contents policy. The type of cover you need will depend largely on whether you own or rent the property and what you want to protect. A homeowner may require both buildings and contents cover, while somebody renting a property would normally leave responsibility for insuring the building itself to the landlord and consider contents insurance for their own possessions.
The exact events covered by home insurance vary between insurers and policies, so it is important to check the terms rather than assume every policy provides the same protection.
Depending on the cover arranged, a policy may provide protection against events such as fire, theft, storm damage, flooding and escape of water.
Some policies may also include accidental damage as standard, while others offer it as an additional option.
Buildings insurance and contents insurance will also respond differently. Damage to the structure of your property would normally fall under buildings cover, whereas loss or damage to possessions may fall under contents insurance.
Policy limits, excesses and exclusions can all affect whether a claim is covered and how much may be paid.
At Allisons Financial, we’ll help you understand these details before you proceed so you know what your policy is designed to protect.
This can include the walls, roof, floors, windows and permanent fixtures and fittings. Fitted kitchens and bathrooms may also form part of the buildings cover, while garages, sheds and other outbuildings can sometimes be included depending on the policy.
If you have a mortgage, your lender will usually require appropriate buildings insurance to be in place.
One particularly important consideration is the amount your property is insured for.
Buildings insurance is generally based on the rebuild cost of the property rather than its market value. Rebuild cost reflects how much it could cost to reconstruct the home following serious damage, including relevant labour and material costs.
Insuring the property for an inappropriate amount can create problems when a claim is made, so it is important to ensure the figure used reflects your circumstances.
This can include furniture, televisions, computers, clothing, kitchen appliances, jewellery and other household belongings. A useful way to think about contents is to consider the items you would take with you if you moved house. When arranging cover, it is important to estimate the cost of replacing all of your possessions rather than simply focusing on the most valuable items.
Policies can also apply limits to individual possessions. Expensive jewellery, watches, artwork, technology or other high-value belongings may need to be specifically declared if their value exceeds the insurer’s standard single-item limit.
Checking these limits before taking out a policy can help avoid finding out that an important possession is not fully covered when you need to make a claim.
If you own your home, you may choose to arrange combined buildings and contents home insurance rather than purchasing two separate policies.
This can make managing your cover simpler because both the property and your belongings are insured under one arrangement.
A combined policy can sometimes provide good value compared with arranging the cover separately, although this will depend on the insurer and your individual circumstances.
It is still important to review the buildings and contents sections individually.
You should check that the buildings sum insured is appropriate, that your contents limit reflects the value of your possessions and that any important exclusions or excesses are suitable for you.
For buildings insurance, the key figure is usually the cost of rebuilding the property rather than the price you could sell it for. For contents insurance, you should consider how much it would cost to replace everything within your home if it were lost or damaged by an insured event.
That includes everyday possessions as well as more expensive items that may be easy to overlook.
Underestimating the value of your contents can potentially leave you underinsured, while high-value possessions may need to be declared separately depending on policy limits. Your circumstances can also change over time. Home improvements, extensions and major purchases can all increase the level of cover you need. This is why reviewing your policy regularly can be just as important as choosing suitable cover in the first place.
These can include the location of your property, its size and construction, rebuilding cost, security features, claims history and the level of cover required. For contents insurance, the value of your belongings and whether you need additional protection for high-value possessions can also influence the premium. Your chosen excess and optional extras can affect the cost too. A cheaper premium does not necessarily mean better value if the policy provides less suitable cover or comes with significantly higher excesses. The aim should be to find cover that provides an appropriate level of protection at a competitive cost rather than choosing a policy on price alone.
An excess is the amount you may need to contribute towards the cost of a claim before the insurer pays the remaining eligible amount.
Home insurance policies can include a compulsory excess set by the insurer and, in some cases, a voluntary excess chosen by you.
Choosing a higher voluntary excess can sometimes reduce the premium, but it also means you may have to pay more yourself if you make a claim.
Different sections of a policy can also have different excesses. For example, escape-of-water claims or subsidence claims may have different excess arrangements from other types of damage.
Understanding these figures before arranging cover helps you avoid unexpected costs later.
Standard home insurance can often be enhanced with additional options depending on the insurer and your circumstances.
Accidental damage cover may provide additional protection where you unintentionally damage your property or belongings.
Personal possessions cover can extend protection to certain belongings when you take them away from home, subject to the policy terms.
Home emergency cover may provide assistance with specified urgent household problems, while legal expenses cover can help with certain eligible legal costs.
Additional bicycle cover or protection for specified high-value possessions may also be available.
Not every optional extra will be relevant to every household, so it is important to choose cover based on your actual needs rather than simply adding every available feature.
Home insurance is designed to protect against specified events, but it does not cover every possible type of loss or damage.
Normal wear and tear is typically excluded because insurance is not intended to pay for routine deterioration or maintenance.
Deliberate damage will generally not be covered, while some problems caused by poor maintenance may also fall outside the policy terms.
Damage or loss to possessions while they are away from your home may not be covered unless you have appropriate personal possessions protection.
High-value items can also exceed standard policy limits if they have not been declared.
Every insurer applies its own terms, conditions and exclusions, which is why reading the policy documentation carefully is so important.
We’ll help you understand the important limitations of the cover before you decide whether it is right for you.
Different people need different types of home insurance depending on how the property is occupied and what needs protecting.
Homeowners – Homeowners may need both buildings and contents insurance. Buildings cover can protect the structure of the property, while contents insurance can provide protection for personal possessions within the home. If the property is mortgaged, your lender will usually require buildings insurance to be maintained.
Renters and Tenants – If you rent your home, the landlord will normally be responsible for insuring the building itself. However, their insurance does not usually protect your own possessions. Contents insurance can therefore help protect furniture, electronics, clothing and other belongings that belong to you.
Landlords – Standard owner-occupier home insurance is not necessarily appropriate for a property that is rented to tenants. Landlords may require specialist landlord insurance designed around the risks associated with letting property. If you are purchasing a rental property, you may also want to explore our Buy to Let Mortgages guidance as part of your wider property planning.
High-Value and Specialist Properties – Some properties can require more specialist insurance. Listed buildings, unusual construction methods, particularly valuable homes or properties containing high-value contents may require an insurer comfortable with those circumstances. Providing accurate information when arranging cover is particularly important in these situations.
Comparing home insurance policies involves more than simply looking at the monthly or annual premium. Start by checking the amount of buildings and contents cover provided. Then look at the excesses that apply, any single-item limits and whether valuable possessions need to be individually listed.
You should also consider whether accidental damage, personal possessions cover, legal expenses or home emergency protection are included or available as options. Exclusions are equally important. Two policies that appear similar at first glance can offer different levels of protection when you look more closely at their terms. This is why we believe suitability should come before price. A policy should provide the protection you actually need rather than simply being the cheapest option available.
At Allisons Financial, we believe home insurance should be easy to understand. We’ll begin by discussing your property, possessions and the protection you are looking for before helping you consider suitable insurance options.
We can explain the difference between buildings and contents cover, help you understand important policy limits and talk you through optional extras where they may be relevant. We’ll also highlight important exclusions, excesses and conditions so you have a clearer picture of how the policy works before deciding whether to proceed.
Because we also provide Protection and Mortgage advice, we can consider your home insurance within the wider context of your financial arrangements rather than treating it as an entirely separate decision. Our aim is to help you arrange cover with a clear understanding of what is protected and what limitations apply.
Home insurance should be reviewed regularly because your property and possessions do not remain exactly the same forever. Moving home is an obvious reason to reassess cover, but there are plenty of other circumstances where a review may be worthwhile. Renovating or extending your property can change its rebuild cost. Buying expensive jewellery, electronics, furniture or other possessions can increase the value of your contents. You should also review your policy if the way you use your property changes. Even where nothing significant has happened, reviewing your insurance at renewal gives you an opportunity to check that the cover and limits continue to reflect your circumstances. Avoid cancelling an existing policy until you are satisfied that appropriate replacement cover is in place.
Your property and possessions are important, and the right home insurance can provide valuable financial reassurance if something unexpected happens. Whether you need buildings cover, contents insurance or a combination of both, Allisons Financial can help you understand your options and the important differences between policies.
We’ll take the time to understand your circumstances, explain the cover available and help you make an informed decision about protecting your home.
Get in touch with Allisons Financial today to discuss your home insurance options.
Allisons Financial provides personalised home insurance advice in St Helens and to clients across the surrounding areas.
Whether you’re buying your first home, moving property, reviewing existing cover or simply want to better understand the protection you currently have, we can help you explore your options.
We support clients across St Helens, Rainford and nearby communities, as well as customers further afield.
Our approach is straightforward: understand what you need to protect, explain the available cover clearly and help you make an informed decision.
Home insurance can provide protection for your property, possessions or both against specified insured events. The exact cover depends on the policy, insurer and options you choose.
If you own your home, you may want both. Buildings insurance protects the structure and permanent fixtures, while contents insurance covers your possessions. Renters will normally only need to consider contents insurance because the landlord is generally responsible for the building.
Buildings cover should usually reflect the cost of rebuilding your property rather than its current market value. The appropriate amount will depend on the property.
Consider how much it would cost to replace all of your belongings rather than only your most valuable possessions. Check whether expensive individual items need to be separately declared.
Some policies include accidental damage, while others offer it as an optional extra. The definition and level of cover will depend on the individual policy.
Renters are not normally responsible for insuring the structure of the property, but contents insurance can protect their own possessions against specified risks.
Allisons Financial Planning Ltd is Authorised and Regulated by the Financial Conduct Authority under reference 808678. You can find us on the FCA Firm Checker (https://www.fca.org.uk/consumers/fca-firm-checker)
Allisons Financial Planning Ltd is Registered in England and Wales, Company no. 5210702. Registered address: 105 Mere Grange, St Helens, Merseyside, WA9 5GG.
The information contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK. The content of this website is for information purposes only and does not constitute financial advice or a recommendation to a suitable product or service. You should seek advice before embarking on any course of action.
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