How does home insurance work?

It can give you financial protection against the cost of repairing your home if it is damaged, or replacing your belongings if they are stolen or broken.

Home insurance can be split into two parts:

  • Buildings insurance: This insures the bricks and mortar of your property, including garages and sheds.

  • Contents insurance: This protects the personal items in your home, such as your TV, furniture and valuables.

You can buy either of these separately, or you can get both together as a combined home insurance policy.

Do you need home insurance?

It is not a legal requirement to have a home insurance policy, but if you have a mortgage your lender will insist you have buildings cover to protect their investment.

However, you may not need buildings insurance if:

  • You rent your property, because it is the responsibility of your landlord to arrange cover

  • You live in a flat, because it is the responsibility of the management company to arrange cover

If your home is destroyed by fire, for example, without home insurance you would need to cover the cost of a new home and belongings yourself, so it is worth having.

What does it cover?

Buildings insurance

Buildings insurance protects you from the cost of damage caused by things like:

It also covers the cost of alternative accommodation if you have to move out temporarily following a claim, and can include benefits like home emergency cover.

Contents insurance

This covers the cost of replacements or repairs if your belongings are damaged or lost as a result of things like fire, theft or accidental damage. You can cover your:

  • Furniture

  • Electrical goods, such as TVs and laptops

  • Clothes

  • Valuables, such as jewellery

A contents insurance policy can also protect the items in your garden, cash kept in your home and belongings you take away from your home.

What types of policy are there?

You can find specific home insurance policies designed for the type of home you own or your personal circumstances, including:

  • Student home insurance: This is designed for students living away from home, and only includes contents cover. Some policies offer things specifically for students like tuition fee cover.

  • Second home insurance: If you own more than one property, like a holiday home abroad, you may need a specific policy to protect it.

  • Unoccupied home insurance: If you want to insure a property that is empty, you need specialist cover because most policies only protect homes unoccupied for 30 days.

  • Non standard home insurance: Properties of unusual construction, like thatched or flat roofed houses, or high value homes may need specific cover because they face different risks to standard properties.

If you are unsure what cover is right for your property, here is how to work out what home insurance you need.

What affects the cost?

The price of your home insurance depends on:

  • The location of your property: Where you live has a big influence on the cost of your insurance, for example if you are in a high crime area or a flood plain it will cost more.

  • The value of your home and contents: The more expensive it would be to rebuild your home or replace your contents, the more your home insurance will cost.

  • Your home security: If your home has things like burglar alarms and security cameras it can reduce your premium. You can find out how to secure your home here.

  • The age and construction of your home: If you own an old property, or it is of non standard construction, you may pay more for cover because repairs can be expensive.

If you are worried your cover will be expensive, try these 8 ways to cut the cost of your home insurance.

Home insurance FAQs


Can I take out a joint home insurance policy?


Yes, if you live with another person you can take out a policy together. This means you can both claim and it can sometimes get you a cheaper premium.


Will I be covered against accidental damage?


Some policies cover accidental damage as standard for certain items, but others only offer it as an added extra.


How do I make a home insurance claim?


You will need to call your insurer's claims number and tell them what has happened. Here is how to claim on your home insurance policy.


Will I have to pay anything if I claim?


Yes, you will need to pay an excess, which will be shown in your policy. Here is more on paying an excess, and how much it could cost.


How can I pay for my home insurance?


You can pay in one up front annual payment, or spread it over the term of the policy in monthly instalments, but this method could cost more overall.