If you own your own home, or are in the process of getting a mortgage, you will know that it is essential to be adequately insured. This applies to both the building itself and everything within it. As a result there are two main types of home insurance: buildings insurance and contents insurance.
Our guide to insurance explains the different types of premiums and coverage, and details some of the important things to look out for when getting your home and its contents insured.
What is buildings insurance?
This type of insurance is needed to cover the actual structure of your home. It covers the walls, windows and roof of the property as well as permanent fittings like the kitchen surfaces and cupboards, plus fixtures such as the bath and the toilets. If you are a homeowner, it is very important that you have buildings insurance, and mortgage lenders will insist on it.
A typical policy will cover your property in the event of damage caused by fire, explosions, earthquakes, lightning, theft and even attempted theft, plus vandalism and riots, storms and falling trees. You may also be covered for flooding and subsidence. See What Does Home Insurance Cover? for more details.
What is contents insurance?
Rather than the physical property itself, contents insurance is there to cover damage to the possessions that you keep in your home. There are a lot of variables with contents insurance, but a typical policy is likely to cover your belongings in the event of damage being caused by fire, explosions, earthquakes, theft (and attempted theft), riots and vandalism, storms and flooding, and damage from falling objects such as a tree. It will also cover damage caused by leaking water or oil within the property.
Many contents insurance policies cover your legal liability as a homeowner, so you will be covered if someone visits your home and has an accident. Theft of cash, and any damage to belongings in your outbuildings, i.e. sheds and summer houses, can also be included on a contents insurance policy. See How Much Does Contents Insurance Cost? for more details.
Other kinds of home insurance
While buildings and contents are the two main types of home insurance, there are other policies that may well be worth investigating, depending on the type of property you have and the circumstances of its location. For example, certain areas are much more prone to subsidence and flooding than others, and it can be harder for homes in these areas to get adequate and affordable cover. See Home Insurance For Flood Risk Areas for more details.
If you are a tenant, you will not need to get buildings insurance, as it is the responsibility of the landlord, although there are special tenants’ insurance policies (sometimes referred to as contents insurance for tenants) designed to specifically cover the needs of people in rented accommodation.
Likewise, landlords can get insurance policies tailored precisely for their needs, with a range of options available – How Much Does Landlord Insurance Cost? explains this type of insurance in more detail.