Homeownership is an exciting thing, offering you the freedom to make changes and empowering you to make your home exactly how you want it to be. With that in mind, however, you will be solely responsible for paying for repairs if something happens to your property. While you need buildings insurance to get a mortgage, as lenders won’t loan you money without a safety net in place, contents insurance shouldn’t be ignored.
Whether you’re a first time buyer or an existing homeowner, buildings and contents insurance is a must. Let’s explore how both of these policies can provide peace of mind for you and your home.
What is buildings insurance?
Buildings insurance is designed to protect the physical structure of your property, including the walls, roof, floors, and permanent fixtures. While it can’t protect your home from unforeseen damage, such as fire, flood, or vandalism, buildings insurance gives you a financial safety net should the worst happen to your property.
What does buildings insurance cover?
Buildings insurance typically covers the cost of repairing or rebuilding your home in case of damage. This will include the structure itself, and typically any built-in appliances, plumbing, and wiring. You also get policies that cover extra structures on your property, such as garages.
What is contents insurance?
While buildings insurance protects the structure, contents insurance focuses on the stuff inside. This could include your furniture, electronics, clothing, and other valuables. Contents insurance means that if you need to replace or repair something because of damage or theft, you have financial coverage.
What does contents insurance cover?
Contents insurance covers a wide range of items, from furniture and appliances to personal belongings like clothing and jewellery. Policies can vary, so it’s important to check what is specifically covered. Some policies may provide additional cover for items taken outside of the home, such as laptops or jewellery. Others may not provide cover for this and you’ll need to explore other options.
Frequently asked question: how much cover do I need?
Working out how much cover you need for both buildings and contents insurance is very important. Not having enough coverage can leave you financially vulnerable if something major happens, whether it’s damage, theft, or loss.
Here’s how to work out how much cover you need:
Buildings insurance cover
You’ll want to consider how much it would cost to rebuild your entire property. Keep in mind that this is not the same as market value, as it focuses completely on the cost of rebuilding from the ground up. The chances of needing to rebuild your entire home are slim, but from there you and your provider will be able to work out how much it would cost to rebuild only specific parts of your home. Consult with a professional valuer to get an accurate estimate.
Contents insurance cover
For contents insurance, you’re going to want to build a comprehensive inventory of your belongings. While you’re doing this, try to give everything a clear value. It’s important to remember that some policies have limits for high-value items.
Regularly update your inventory to reflect any new purchases or changes in your possessions. If you need to make a claim and don’t have enough cover for everything in your home, you may encounter some obstacles.
The importance of having buildings and contents insurance
While it’s vital that you have buildings insurance if you’re looking to get a mortgage, contents insurance is not compulsory. That being said, if you’re unsure whether you need it, ask yourself if you could afford to replace everything you own. If something happened to your kitchen, would you be able to afford to replace all the appliances in there?
Make sure you’re protected in the case of unforeseen events, so that you don’t inadvertently place yourself in a vulnerable financial situation. For personalised advice, tailored to your specific needs, get in touch with one of our expert advisers. We don’t just do mortgage advice, we can also help you with your insurance.
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