Home insurance policies exist to cover not only the building itself, but your possessions in it. This can equate to hundreds of thousands of pounds should the worst happen and your property and possessions were irrevocably damaged, so it’s important to make sure you’ve got the right policies in place.
Here, Telegraph Money explains what home insurance covers and, crucially, what it doesn’t.
Home insurance can also cover the cost of replacing anything that’s stolen, or repairing or replacing your belongings if they’re damaged by less dramatic everyday accidents.
Types of home insurance
There are two main types of your home insurance to know about – contents cover and buildings cover.
Contents insurance covers your belongings and things in the property, which includes furniture, rugs and appliances like televisions and tablets, as well as your personal possessions including clothes, jewellery and golf clubs.
Contents insurance covers these items against theft and damage by things like fire or flooding. This type of insurance is for everyone, whether you rent or own your home.
Under a buildings insurance policy, the structure of the property and its permanent fixtures and fittings, such as the kitchen and bathrooms are covered.
You can claim for damage from fire, storms and flooding as well as theft. Your insurance should also cover the full cost of rebuilding your house.
Only homeowners need to worry about buildings insurance. If you’re a tenant, your landlord will arrange buildings cover via landlord insurance.
If you own the freehold of your property then you’ll need to organise buildings insurance yourself. If you own a share of the freehold or leasehold on a flat then usually the managing agent looking after the block will arrange the cover and each flat will contribute as part of the annual service charge.
What does home insurance cover?
Coverage varies by policy, but you can expect most home insurance providers to include the following:
Theft
Your home is covered to pay out to replace items that are stolen – contents cover pays out for personal possessions, while buildings cover is for fixtures and fittings that get taken.
Damage
You can also claim for damage from fire, storms and flooding, as well as damage by attempted theft.
Subsidence
This is when a property’s foundations collapse or sink, threatening the structure of the building. It’s usually covered under buildings policies, but it can be more difficult or more expensive to find cover if the property has prior history of subsidence.
Water damage
Water damage can arise from issues such as burst pipes, a leaking dishwasher or perhaps a blocked toilet. You’ll usually be covered, provided that your home has been properly maintained.
Accommodation costs
If your home suffers severe enough damage that it’s uninhabitable, your insurance provider could cover the cost of alternative accommodation for you and your family while repairs are being carried out.
Rebuilding your home
Your insurance should also cover the full cost of rebuilding your house if it was completely destroyed. Some policies will ask for a specific sum (which is not the same as the market value of the house), but others will offer an unlimited amount where there’s no cap.
Legal cover
This is designed to cover legal costs if someone were to take legal action against you, or if you want to bring a legal case against someone – perhaps a nuisance neighbour who’s damaged your property. This cover can be included as part of your home insurance policy or offered as an add-on.
Outdoor cover
Policies may cover garages, greenhouses, fences, patio and garden sheds – although they can vary.
What home insurance typically excludes
As always when it comes to insurance, you won’t be covered for absolutely everything – there will always be exclusions. While each policy will vary, the key exclusions to be aware of are:
Accidental damage
This is not usually included as standard on policies, so if a dinner guest accidentally spills red wine all over a cream carpet or if you drill through a water pipe, you likely won’t be able to make a claim.
Wear and tear
You won’t get a payout for normal wear and tear – this includes damage that’s happened gradually over time and needs maintenance.
Deliberate damage caused by you or your family
Your insurer won’t pay out for deliberately damaged or destroyed items.
Theft by a guest invited into your home
If you are burgled by someone you allow into your home your insurer is unlikely to pay out on a claim.
Negligence
If you fail to repair something that gets worse and leads to more damage – such as not fixing loose roof tiles or having a damp patch remedied – then your insurer will likely reject any claims you make.
Breaking down or becoming faulty
You won’t usually get a payout for mechanical or electrical breakdown of an appliance due to age or lack of maintenance.
Empty home
Most insurers will only cover a home that’s empty for up to 60 days. If it’s empty for longer and you make a claim, it will likely be rejected.
High value items
Standard contents policies usually include cover for a single item limit of around £1,000. So, if you have any artwork, jewellery, antique furniture, bikes or computer equipment these items will need to be listed as a separate entity on the policy for them to be covered – or you might need individual item insurance.
Your insurer will calculate the price for individual items according to their value and where they’re stored.
Your insurer may insist on items such as jewellery being placed in a safe when not being worn, as a condition of the cover.
The importance of home insurance
Home insurance is important for the peace of mind that your home and belongings are protected.
Buildings insurance is usually made compulsory by a mortgage lender before it will release the funds for a loan.
However, it makes sense to have this cover with or without a mortgage, because should your home suffer serious damage you would be footing the bill yourself without insurance.
Contents insurance isn’t compulsory, but it’s a good idea to get it in place, as if any of your contents were to be lost, stolen or damaged you will have to pay to replace them.
One important aspect of getting the right contents insurance in place is to make sure you select the correct level of cover, as this is the maximum your insurer will pay out if you make a claim. Make sure you include everything from carpets and curtains, clothes and shoes, jewellery and watches. It might help to go through the house room by room and write down the value of the contents in each.
You don’t have to buy buildings and contents cover from the same insurer, but it can be better value – and might make it easier when it comes to renewals and if you needed to make a claim, as there’s just one company to deal with.
It’s a good idea to compare costs using a comparison service to get the best value cover.
How to make a home insurance claim
Making a claim should be a straightforward process. Here’s our step-by-step guide:
Step 1: Contact your insurer
To make a claim you should get in touch with your insurer as soon as possible after any damage or theft takes place.
There is usually a phone number to call specifically for claims on the provider’s website. It should also be on your home insurance policy documents.
Before dialling it’s a good idea to have details such as your policy number to hand, though they can probably find your policy using other information. Be prepared to answer a few security questions before you get into the claim.
Step 2: Explain your claim
Explain what you’re claiming for and provide as much detail as you can surrounding the reasons for your claim.
If necessary, read out a list of items and possessions that have been damaged or stolen.
If your claim is for burglary (or theft of possessions away from home), you’ll also need a police crime number.
Step 3: Sort temporary repairs
Ask about temporary repairs, if needed, to stop any damage getting worse. Your insurer might insist on choosing a firm from an approved panel.
If it’s an emergency situation that needs remedying – such as a flood – and there’s no time to speak to your insurer first, get receipts for any emergency work to submit in your claim.
Step 4: Complete a claim form
You might need to fill out a claim form, though some insurers may be able to settle a claim over the phone.
Step 5: Submit evidence
Photographic or video evidence might be requested to show the damage to your possessions. Make sure you take these – if you can – before you tidy up and throw away ruined items.
In the event that a loss adjuster needs to visit (they’re responsible for assessing how much compensation you should receive), you might need to leave everything untouched so they can see the full extent of the damage with their own eyes.
Step 6: Document your communications
Take notes of the communication you have in each conversation with your insurer, including the date and time of each call, bullet points on what was said, and any action required.
This could come in handy further down the line if any complications with your claim arise.
Step 7: Await a decision
Your insurer might take time to process your claim. If it’s rejected, your insurer should explain the grounds for the rejection.
Take the time to check whether these are correct. If you disagree with its decision you can contact the insurance company to make a complaint and, if applicable, request an independent assessment of the situation.
If you still don’t get the outcome you think you deserve, you can escalate your complaint to the Financial Ombudsman Service (FOS).
