Buildings and Contents Insurance

You need two types of insurance to effectively protect your property - buildings and contents insurance.

Buildings insurance looks after the costs of repairing or rebuilding your home - including the fixtures and fittings like kitchen units, built-in wardrobes, sinks and baths.

Contents insurance looks after your personal possessions - these are the items you can pack up and move to another home, like carpets, furniture and curtains.

Buildings insurance

The key factor about buildings insurance is making sure you have sufficient cover to rebuild your home from the foundations upwards if disaster strikes.

The rebuilding cost is not the market value of your home and has nothing to do with the value assessed for Council Tax.

Insurance companies use a formula to work out the rebuilding cost - but generally, it's lower than the market value because if your home is damaged beyond repair and requires rebuilding, the land beneath is still intact.

The land is about a third of the value of your home, so the rebuilding cost is often less than the price of a new home.

If you have a mortgage, most lenders make taking out adequate buildings insurance a condition of the loan.

Many will try to sell their own product to you, but don't take up the offer without considering other options that may offer better or cheaper cover.

Contents insurance

The key factor for contents insurance is the 'sum insured' - this is the top line your insurer will pay out.

If you set the sum insured too high, the insurer pays out the value of your possessions and you will pay too much for your policy.

If you give the insurance company a sum insured that's too low to keep your premium down, the insurer will pay out less than your possessions are worth if you make a claim.

It's important you take a long, hard look at your possessions and give them a fair value so you set your sum insured at the right level.

Buildings and contents insurance conditions

Understanding exactly what you insurance covers is important.

Some basics are covered by every policy - like settling claims for fire or theft. Depending on where you live, you ought to consider how much cover is offered for events like flooding and subsidence as well.

You should also regularly review your rebuilding cost and sum insured to make sure the cover still meets your requirements.

Avoiding rejected claims

Don't forget to look after your home and possessions. If the insurance company can wriggle out of settling your claim because they consider you have not maintained your home and this has contributed to damage or you have not guarded against loss or damage to your possessions, they will.

Set up a maintenance regime for your home, like cleaning gutters and dealing with slipped roof tiles.

Protect your possessions by fitting insurance company approved locks - especially to your garage, shed and ground floor windows and doors.

Combined buildings and contents insurance

There could be discounts available for taking both buildings and contents insurance policies out with the same insurer.