Having a good home insurance policy in place is key to protect your home and its belongings. But how do you work out how much home insurance cover you need?
Too much and you could be overpaying. Too little and you might find some key features aren't covered.
Here's what you need to know.
Your home might suffer from structural damage or something happens to your belongings. In this case, you want to sort it with minimal fuss and cost.
Both policies act as a safety net if something should happen.
But how do you work out how much insurance cover you need? If you have lots of valuable items, you might need a specialist contents insurance policy.
If you live in a home that’s got an unusual structure, you may need a specialist buildings insurance policy.
You should think about this when you’re deciding how much cover you need. But working this out can be confusing.
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How much is home insurance?
According to our research, the average cost of home insurance per year is £149.67*.
A single buildings insurance policy costs £54.88, on average. A contents insurance policy costs £126.72 per year on average*.
But this can vary for everyone. Some people might need more cover for valuable items, like jewellery or furniture.
Others might have a home with an unusual structure, for example a thatched roof, which may need more cover.
All these factors could affect the price you pay for your home insurance.
What does buildings insurance cover?
Buildings insurance covers most structural issues to do with the house. It should also cover any permanent fixtures like light fittings, walls, floors, and pipes.
For example, if a tree fell onto your roof then your buildings insurance policy should cover the repairs.
Most buildings insurance policies also cover issues related to subsidence. That’s unless your home has had subsidence before, in which case, you may need to chat to your insurer.
What does contents insurance cover?
Contents insurance covers your belongings such as sofas, televisions, and laptops.
For example, if a pipe bursts and destroys your sofa then your contents insurance policy should cover it.
Usually it covers items up to £1,000. Anything over this may be worth considering extra insurance for your high-value items.
Can I get separate policies for buildings and contents insurance?
Not everyone needs to get both types of home insurance cover.
If you're a tenant you shouldn't need to worry about buildings insurance as that's your landlord's responsibility.
This includes being a student and living in a shared accommodation. Students are more likely to be a victim of crime, so it's a good idea to consider student contents insurance.
How much buildings insurance do I need?
When getting a quote for your buildings insurance policy, it's worth finding out how much it might cost to rebuild your home from scratch.
This isn’t based on your home's value when you bought it, or even what it’s worth now. It could be much lower than that.
This is because when a house in on the market, several factors are considered including:
- School catchment areas
- Surrounding land
When you look at the rebuild cost, it’s more likely based on the cost of building a like-for-like property.
Factors like home improvements could also affect the rebuild cost. For example, if you’ve had an extension built then this may need to be rebuilt if your home was destroyed.
A higher rebuild cost is usually needed for older houses. Or for houses with a non-standard construction, like Victorian properties. The rebuild cost might also vary over time.
There are a couple of ways you can calculate your rebuild cost. If you’ve recently got a mortgage, you should have a home valuation, which usually lists what it'd cost to rebuild. Or you could use the ABI’s rebuild cost calculator.
The rebuild cost is known as the ‘sum insured’. It’s worth working this out when you’re about to get a home insurance quote or if you’re renewing. Having this figure should ensure you have the correct amount of cover.
Other types of buildings insurance
Non-standard construction buildings insurance
Some insurers might charge you more if your home isn’t a standard construction. For example, a thatched roof or a house made from wattle and daub.
On these occasions you might need to seek out specialist home insurance, as some insurers might not offer it or offer the right level of cover.
Listed buildings insurance
These are houses with special historic interest. According to Historic England, there are around 400,000 listed buildings in England.
They're split into grades:
- Grade I: buildings with exceptional historic interest. Only 2.5% of the 400,000 are Grade I.
- Grade II*: particularly important buildings with more than a significant historical interest. 5.8% of the buildings in the 400,000 are Grade II.
- Grade II : these are of special historic interest and every effort is made to preserve them.
If something should happen to a listed building, you may need specialist materials and expert tradespeople to repair it. A listed building insurance policy should cover this.
For more information, read our guide on the different types of buildings insurance.
How much contents insurance do I need?
It’s worth looking around your home and listing the items that you think are valuable. This can include your:
- Games consoles
Even things you might not think of, like kitchen equipment or expensive cutlery, should go on the list too.
Remember, these are items you’d want to replace if they get destroyed, so be thorough with your list.
You can find a room-by-room breakdown of items you might want to cover in our guide on calculating how much contents insurance you need.
It’s important to be accurate with this. If you underestimate you might end up with not enough cover. If you overestimate, you might find that you’re paying too much.
How do I work out how much contents insurance I need?
If you’ve kept your receipts for any white goods, your sofa, even small electrical items, this is a good place to start.
You could also do a quick search online to see how much your item retails for to give you a basic guide price.
Another option is using our contents calculator.
Insuring high-value items
Some contents insurance policies have an upper limit for the cost of an item. For example, if you had jewellery worth over £1,000.
In situations like this, it’s worth considering extra cover.
Some items in your home should be easy to value after a quick search.
This might not be so easy if you own antiques or paintings. In this case, it’s worth seeking out professional advice when it comes to a valuation.
What home insurance cover do I need if I rent?
You shouldn’t need to worry about buildings insurance if you’re in a rented place. This is your landlord’s responsibility.
But your items aren’t covered under buildings insurance, so it's worth considering contents insurance.
If you live in a furnished rented place, you shouldn't need contents insurance for those items. For example, if it’s already kitted out with sofas and white goods. Your landlord should have cover for these, but it’s worth double checking with them.
But if you’re bringing in your own sofa, oven, or white goods, getting a contents insurance policy should cover them.
You might also want to consider getting cover for your own things like your clothes and gadgets.
*April 2022 data - top average premiums by product type excluding quotes with claims or accidental damage.