As a UK homeowner, you want to make sure that you have sufficient insurance in place for financial protection and reassurance. Many get confused about the difference between buildings and contents insurance, so this post will break down what each policy covers and guide you in choosing the right protection for your property and possessions.
Protecting the Structure with Buildings Insurance
First, you have buildings insurance. As the name suggests, this type of insurance covers the physical structure of your home, including the walls, roof, and permanent fixtures. Buildings insurance is often a requirement for mortgage lenders to ensure the cost of rebuilding the property is covered in the event of major damage. You will need to estimate the rebuild cost of the home rather than focus on market value when taking out this type of insurance.
Safeguarding Your Belongings with Contents Insurance
Contents insurance, meanwhile, covers your belongings inside the home. This includes furniture, appliances, personal belongings, and valuables. As with car insurance, there are different levels available, such as “new for old,” which replaces items lost or stolen with brand-new equivalents. It is important to accurately assess the value of your belongings, so it is smart to keep a spreadsheet and retain any receipts for high-value assets, such as jewellery or artwork, in case you need to make a claim.
Combined Vs. Separate Policies
Some home insurance providers offer combined buildings and contents insurance into a single policy or you can take them out separately. Combined policies are obviously more convenient and can be cost-effective, but separate policies tend to have more flexibility. The key factors to consider are whether you own or rent the property, the level of cover needed, and the cost and ease of managing the policy. As with any type of insurance, you should always shop around and compare your options.
Optional Extras & Considerations
There are also a few options extras you can consider for your home insurance policy. This includes things like accidental damage cover, which provides protection against accidents like spills and broken furniture, legal expenses cover for help with legal fees, and home emergency cover for assistance with urgent repairs. There may also be additional considerations for the type of property you live in, such as shared ownership responsibilities if you live in a block of flats.
Every homeowner needs to have a strong understanding of buildings insurance and contents insurance and the difference between the two. You want to make sure that you are fully protected, so either combining these into one policy or taking out two separate policies is smart and will provide protection against various threats, including natural disasters, fire, theft, and accidental damage. In addition to providing significant financial protection, this will also provide peace of mind – something you cannot put a price on.
