How does home insurance work and what does it cover?
As the writer Laura Ingalls Wilder once said, “Home is the nicest word there is.” And we’re pretty sure that insuring your home and your personal belongings is one of the most important things you can do.
With the amount of insurance providers and policies out there, however, it’s easy to get confused.
Our bumper guide is here to help you understand exactly how home insurance works and what it covers, and to answer the questions you may have.
How does home insurance work?
Home insurance is there to protect your home and your belongings should things go wrong. You take out a policy that’s tailored to the type of home you have, the level of cover you need, and the extra things you want protecting. For example, if you live near a flood plain, you’ll want to keep the risk of potential flood damage in mind.
If you live in a listed building, or on a farm, standard home insurance might not be enough. If you don’t own any expensive jewellery but have a super-fast mountain bike you keep at home, chances are you’ll want that covered in case of theft. It’s important to know exactly what your policy covers so you don’t risk making a claim on something you’re not insured for.
What does home insurance cover?
This depends entirely on the type of insurance you take out. Remember, home insurance is a generic term - it’s better to think of it as either buildings or contents insurance. Each one covers different things. For full protection, you’re best taking out a combination of the two.
Each type of home insurance is explained below.
What does buildings insurance cover?
The structure of your home - literally, the building: the roof, walls and windows. It also covers any permanent fixtures and fittings, such as kitchens, and bathrooms, as well as things like central heating storage tanks and permanently-fixed solar panels.
A good buildings insurance policy should cover you for unforeseen events that are out of your control, for example: floods, fire, storm damage, vandalism and damaged caused by burst pipes. Temporary accommodation may also be provided in the event that your home becomes unsuitable to live in, but you should double-check this with your chosen insurer.
What does home insurance exclude?
General wear and tear or the maintenance of your home. Insurers also won’t shell out for loss or damage as a result of war or terrorism, and if your property is unoccupied for more than 30 days (and you don’t tell your insurer), you could be at risk risk of invalidating the policy. The length of this period may vary for each insurer, so check your policy.
Buildings insurance does not cover the contents of your home or your personal belongings.
Does buildings insurance cover…
Not necessarily. Although this is something a lot of people want from their insurance because it covers accidents around the home (spillages, etc.), most of the time it’s only offered as an add-on. Check with your provider.
Yes. All decent buildings insurance policies should cover subsidence. If you notice cracks in the wall, or your property has suffered from subsidence before, you must tell your insurer straightaway. Keep in mind, though, that the excess payable if you want to claim for subsidence issues may be high.
No. This comes under ‘general wear and tear.’
As a general rule, no. You will most likely have to take out extra cover for this - lots of policies will offer Home Emergency Cover, which may cover infestations of mice, rats, wasps or hornets, but only inside the main building of the home. Outbuildings, like sheds and garages, may not be covered.
Only in an emergency, where water is getting into the home due to a storm or bad weather. If you just need tiles replacing, a lot of insurers won’t cover you, as loose tiles are classed as ‘general wear and tear.’ You need to prove that the damage to your roof is as a result of a storm or bad weather.
As long as they’re part of a fitted kitchen, then yes.
Greenhouses are often classed as outbuildings, so whether you’re covered for greenhouse repair depends on your insurer. Some will cover all outbuildings and sheds, others won’t. Check with them.
Is buildings insurance compulsory?
Having buildings insurance isn’t compulsory, but if you own your home, or if you’re applying for a mortgage, you will almost always need buildings insurance. A lot of mortgage providers actually make having buildings insurance a condition for securing a mortgage, so it’s important you have this in place when exchanging on a property. If you’re a tenant, your landlord should have buildings insurance for the property you’re renting.
When researching buildings insurance, remember that it needs to cover the rebuild cost of your home i.e. what it would cost to build it again from scratch. This isn’t necessarily the current market value of the house, or the amount you bought it for. If you’re unsure about this figure, many insurers have free online calculators you can use. You could also consult a qualified surveyor.
It’s recommended that you regularly review this figure as you update or make changes to your home. Bear in mind, too, any extensions or renovations you have done to your home, as these can affect its rebuild cost.
What does contents insurance cover?
Put simply, the contents of your house. So, household goods, furniture, high risk and expensive items, and any personal possessions belonging to you and your family. These all need to be insured against loss or damage as a result of theft, fire and water leakages, and even against storms and earthquakes (as unlikely as these events may be).
How does contents insurance work?
First, you need to estimate the value of all the items in your home you’d like covered. Make sure that you provide as accurate a figure as possible. Remember, this estimation is for replacing the contents in case they do get damaged, lost or stolen - you don’t want to underestimate and then have to make up for an insurance shortfall out of your own pocket.
It’s worth going round each room in your house to make an inventory of your belongings - what each thing is and how much it cost. It’s easy to overlook certain items, so you need to consider everything you want covering, from carpets, to curtains, to pictures and furniture. Don’t forget clothes and the contents of your shed.
Look around your home for high-value items, as these may need to be listed separately on the policy. Check your policy for what it considers to be ‘high value’, but this is usually around £1,000. Think about jewellery, art and pieces of technology.
Most insurance providers only pay a limited amount out for each of the high-value items listed, so read the policy carefully before committing to it. It is also possible to pay for additional contents cover, if needed.
What does contents insurance exclude?
There are some things that won’t be covered by a standard contents insurance policy, and because most people have possessions that they are particularly wary of protecting, insurance providers should have these optional extras available:
Personal possessions cover
If you want to protect your possessions outside the home, you’ll need to tell your insurer.
Personal possessions insurance can provide cover against loss or damage, anywhere in the world. This amount varies depending on your insurer, and other policies will include personal possessions insurance as standard.
The most common items protected are:
- mobile phones (up to £500 with Admiral Home Insurance)
- iPods laptops
- sports equipment.
High-value items cover
A high value item is something that’s worth over £1,000. Insurance providers will want to know about any of these things in your possession, whether they leave the house with you or not. In most cases you will need to provide a detailed description, and maybe even proof of valuation.
Admiral’s list of high-value items include:
- any collectible articles which are rare or unusual
- audio visual, photographic or sporting equipment
- computers, laptops, tablets and notebooks
- jewellery, watches or pearls
- pictures, prints or works of art
- precious metals or stones
- stamp, coin or other collections
- musical instruments.
All bikes that are worth up to £350 and are kept inside the home are most likely to be covered by standard contents insurance.
However, it’s really worth reading the small print, as the level of cover and where it applies to varies from insurer to insurer.
To break it down as simply as possible:
- Bikes worth up to £350 are covered in and away from the home (worldwide) when standard contents insurance is purchased with Admiral so you don’t need additional cover
- Bikes worth more than £350 must be individually specified on your policy to be covered to their full value. Depending on the policy tier you opt for, you could get cover for up to £4,000 for your bike.
You may want to buy bicycle insurance if your bike is particularly expensive.
This is usually the main issue we want to insure our bikes against - having them (or parts of them) stolen. The above categories should cover bikes in any event of theft, depending on the type and level of cover you have taken out.
Theft from outbuildings is sometimes offered by insurance providers on higher-level tier policies - make sure you ask about this if you plan on keeping your bike in a shed or garage. Some insurers can be specific about the where you keep your bike is kept and will insist that it’s locked to an immovable object using a security device.
Does contents insurance cover…
Fridge freezers and contents?
Most standard contents insurance policies will cover the contents of your freezer up to £1,000, as long as the freezer is under 10 years old and being used at the time. It may also include any secondary freezers you have, such as one you keep in the shed or utility room. It’s definitely worth double-checking this with your chosen insurer. Be aware that insurers will not cover a mechanical breakdown, and in that event you will need to contact the manufacturer.
In the event of a power failure, a sudden fault, the sudden rise or fall in temperature, or contamination, a lot of insurers may also provide cover for the food in your freezer, too. Although we rarely count food as something of value, all those frozen cuts of prime meat and fish could really add up. Again, this is something that’s worth checking with your insurance provider.
There are times of the year when your freezer is packed to burst, and your insurer could provide cover for then too by temporarily increasing your contents insurance during certain times. This is usually called Celebration cover.
Not necessarily. Kitchen appliances, and many other things around the house, are often covered by Accidental Damage cover.
Accidental damage cover is there to protect against the unexpected, and it’s available whether you’re buying buildings-only, contents-only or a combined insurance policy.
So, if you’ve got a Nutribullet that you depend on for your morning smoothie, or a mixer that helps you bake amazing cakes, you may want to consider taking out accidental damage protection, so you can replace them if are accidentally damaged.
Items are not covered for mechanical failure - we will only cover if the items was accidentally damaged or by an insured peril.
What information do I need to get a home insurance quote?
To calculate a quote for home insurance, most insurers will ask for the following things:
- details of your property, including the number of rooms, the year it was built, what security there is, and how it’s heated
- exterior details, such as the type of roof, signs of subsidence or whether it has a history of flooding
- information about who lives there, including who owns it, their jobs, and how often it’s left empty
- rebuild costs and what contents you want covering.
Making changes to or cancelling your home insurance policy
If you’ve bought a home insurance policy but then decide it’s no longer suitable for you, you should be able to cancel it with any reputable insurance providers. Most will give a 14-day cancellation period and charge you an administration fee to cancel the policy.
If you want to cancel it after 14 days then a higher administration charge may apply, plus the applicable amount of your premium. If you’ve made a claim during this time then your full premium may be due.
It’s also possible to make changes to your policy once you’ve bought it - for example, you may decide that you need additional cover, or no longer need certain items protecting. Again, you’ll have to pay an admin charge and any changes may affect the overall premium.
Providing the most up to date and accurate information about your home and its contents (including after the policy has started) will ensure that you won’t be at risk of making an invalid claim or your premium may change as a result of wrong information. . It pays to be thorough and to stay up-to-date!
How to make a home insurance claim
If you have to make a claim, follow these steps:
- Report any theft, attempted theft, or damage to your property to the police. They will give you a Crime Reference Number, which is essential for this type of claim
- Check your policy documents to ensure that the loss or damage you have suffered is covered by the policy
- Call your insurer’s claims department - they should have a helpline you can ring immediately
- Provide the following information:
- Your personal details so they can confirm your identity, including your policy number
- The incident date, time and cause of the loss or damage
- Details of the loss or damage including the claim value if known (i.e. how much it’ll take to rectify)
- Details of any other person responsible for the incident, any injured person, witness or police contact details including your Crime Reference Number.
Your insurer may also ask for the following things: original receipts, invoices, valuations, original packaging, or instruction manuals. Having these to hand may really help in supporting your claim.
When this has been done, your insurer will begin to process the claim. The speed at which it’s settled will depend on its nature - for example, if more than one person is involved, or if it’s as a result of something like subsidence or escape of water, it could take much longer to process.