Buildings and contents insurance are both types of home insurance. Buildings insurance covers you against financial losses if the structure or permanent fixtures of your house are damaged, and contents insurance is for your belongings that would go with you if you moved. There are many different levels of cover, so here are some things to be aware of when choosing a policy.
In buildings insurance it is of utmost importance that the full cost of rebuilding your property is covered and not just the market value. The land your house is built on is unlikely to be damaged by fire or flood, and it is often cheaper to rebuild a house on the existing plot than to buy another. Bear in mind that similar houses just a few streets apart may be worth different amounts, but rebuilding costs will be the same.
Your contents insurance must give enough cover to replace your belongings, so be careful not to under insure. This means that the maximum your insurer will pay is not enough to cover your losses. Your premium will increase with the amount of cover, but it would be a false economy to under insure because if you were unlucky enough to make a claim you would lose out financially.
To get an accurate idea of how much cover you need, take an inventory of your belongings, including gifts and homemade items, and work out the total. Look for new for old policies so that you get the cost of a new replacement item, not the value of your old used one which could be a lot less.
You should think about cover for the contents of your home that you take out and about, like mobile phones, or jewellery. Also think about the contents of your garden, greenhouse and shed, are your tools and garden furniture covered?
Different buildings insurance policies give different levels of cover. In addition to the house, look for policies that include outbuildings like your greenhouse, shed and garage, which can be expensive to repair.
If you make any changes to your property, such as an extension or loft conversion, make sure that you inform your insurer and update your policy, otherwise you may lose out if your improvements are subsequently damaged or destroyed.
Look out for discounts if you buy your contents and buildings insurance from the same provider. Do shop around and remember that the cheapest cover may not be the best value, and for a slight increase in premium you may be very grateful for the additional cover should you be unlucky enough to need it.
