Two Main Types of Home Insurance Explained

Our homes are very important to us. Not only are they the largest investment that most people ever make, but they often also house the great majority of our material possessions. To replace or repair the home and all its contents in the event of a fire or other such unfortunate circumstance would be beyond the financial reach of most people. Therefore, it would seem prudent to take out an insurance policy to cover the cost of repairing the property and replacing its contents should the need arise. 

The two main categories of home insurance are referred to as buildings insurance and contents insurance. Buildings insurance, as the name suggests, covers the actual structure of the building and any permanent fixtures, such as the plumbing or the windows, against the possibility of damage in an event such as a fire or flood. This type of insurance is typically taken out by the owner of a property, or in the case of a block of flats, the freeholder of the building.

If you own a flat within a larger building, check with the freeholder, who may be the local council or a private individual, as to the degree of their insurance coverage as you may find that you do not need buildings insurance of your own. If you are renting, then it is not usually your responsibility to take out buildings insurance. The cost of buildings insurance is dependent upon many factors, such as the stability of the land and the building structure, the age and type of the building and the materials used in construction, and whether the building is listed or not. It is a good idea to make yourself fully aware of all of these variables before applying for buildings insurance as it will greatly speed up the process of having the building insured.

Contents insurance, on the other hand, covers only objects that can physically be taken out of the building, such as electrical goods and furniture.  Generally speaking, the occupier of the property takes out this type of insurance, whether they are a tenant or the owner. When purchasing an insurance policy it is worthwhile considering everything that would need replaced in the event of an unfortunate incident, including less obviously valuable items such as clothing or kitchenware as well as the more obviously valuable items.

It is important to read the small print of what is considered to be ‘home contents’ under the terms of your policy, as it may or may not cover you for items such as garden tools and bicycles stored out with the boundaries of your main living space. Some insurers brokers, such as the Co-operative Insurance, offer package deals combining both buildings and contents insurance aimed at saving the homeowner both time and money.