How To

How to get the right home insurance

Paula John
Written By:
Paula John

No lender will agree to give you a mortgage without buildings insurance – and contents insurance is also recommended. The two together are often referred to as ‘home insurance’.

Buildings insurance

If you are the freeholder (you own the building and the land that it stands on), it is your responsibility to arrange the building insurance. If you are a leaseholder (which usually means you live in a block of flats) it is the responsibility of the freeholder to arrange the building insurance, so ensure they have done this.

Your property is the lender’s security on the loan, so it will understandably want you to have that property insured against damage from fire, subsidence or heavy storms.

Your lender will usually offer to sell building insurance, though you may get cheaper cover elsewhere. But do bear in mind that if you take your mortgage lender’s insurance, they have a vested interest in your property and therefore may be more amenable to covering your claim in full should the worst come to the worst.

If you rent your property out to tenants it is vital that you tell your insurer. It is unlikely that they will increase the premium you pay, but due to the wording of your contract it may become null and void if the property is not your primary residence.

If you are unfortunate enough to live on a floodplain, you should still be able to find an insurance policy that covers your property, but bear in mind that your premiums are likely to be higher than they would be elsewhere.


Contents insurance

Contents insurance is often sold alongside buildings insurance.

Your lender will not insist on your taking out contents insurance, but it is  recommended. If you ever need to make a claim, you will receive the cost of the replacements for damaged goods from your insurance company.

Decide whether you want a new-for-old policy or cash, and assess the value of your possessions to make sure that you are not under-insured or over-insured. How much should you insure for?

There is no short-cut route to determining the value of your possessions. You will have to take a bit of time going from room to room and assessing what everything is worth. Most people prefer new-for-old contents insurance policies, because they get an exact replacement or even an upgraded version of the goods lost. You don’t have any of the frustration of having to shop around for the goods you have lost as you do when you receive cash in place of your lost goods.

Some insurers offer lower premiums if you have a burglar alarm installed (BS4737 approved). You should also have five lever mortice locks fitted to all external doors (to BS53261 standard), and doors should ideally be at least 44mm thick. You may also get a cheaper deal if you are a member of a Neighbourhood Watch scheme.

There are plenty of contents insurance options around, from traditional insurers to supermarket banks and online sources. Always shop around for the best cover.