Home insurance protects what is often the largest financial asset and the most important living space most households have. Getting it wrong means either paying for cover you do not need, or being underinsured at the worst possible time — after a fire, flood, or burglary. This hub explains how buildings and contents insurance works, what is and is not typically covered, and how homeowners, renters, and landlords should approach cover differently.
Buildings vs contents — who needs what
| Occupancy | Buildings insurance | Contents insurance |
|---|---|---|
| Homeowner (with mortgage) | Required by lender | Strongly recommended |
| Homeowner (mortgage-free) | Strongly recommended | Strongly recommended |
| Tenant/renter | Not needed (landlord’s responsibility) | Your responsibility |
| Landlord (letting property) | Specialist landlord buildings insurance | Landlord contents if furnished |
Buildings insurance must be in place from exchange of contracts if you are buying with a mortgage — not from completion. This is a contractual requirement of most mortgage offers.
What buildings insurance covers
| Covered — typically | Not covered — typically |
|---|---|
| Fire, explosion, lightning | General wear and tear |
| Storm and flood damage | Gradual deterioration |
| Subsidence (sometimes add-on) | Pest damage (mice, insects) |
| Escape of water (burst pipe) | Slow leaks discovered late |
| Impact from vehicles or falling trees | Poor maintenance |
| Vandalism and theft of fixtures | Accidental damage (unless added) |
The sum insured for buildings insurance should be the rebuild cost — what it would cost to demolish and rebuild your home from scratch — not the market value. These figures can differ significantly. Use the BCIS rebuild calculator to verify yours.
What contents insurance covers
Contents insurance covers your belongings inside the home. Most policies have:
- A total contents limit — typically £50,000–£75,000 for standard policies
- A single article limit — usually £1,500–£2,500 per item
- Items above the single article limit must be separately specified
- High-value items (jewellery, art, instruments) often need a separate schedule
| Item type | Typical treatment |
|---|---|
| Furniture and white goods | Included in standard cover |
| Electronics and gadgets | Included, subject to single item limit |
| Jewellery and watches | Above-limit items need to be specified |
| Bicycles | Usually excluded or limited; may need add-on |
| Garden furniture and equipment | Often excluded or limited to £500–£1,000 |
| Cash | Usually limited to £200–£500 |
Average costs in 2026
| Cover type | Typical annual cost |
|---|---|
| Buildings only (average 3-bed semi) | £130–£200 |
| Contents only (average 2-bed flat) | £60–£120 |
| Combined buildings and contents | £150–£350 |
| Landlord buildings insurance | £180–£350 |
| Renters contents | £60–£120 |
Prices vary significantly by postcode, claims history, excess level, and cover limits. Flood-risk properties and listed buildings attract higher premiums.
Worked example — the underinsurance problem
David bought his Victorian terrace in Bristol for £380,000. He set his buildings sum insured at £380,000.
After a kitchen fire, the insurer appoints a loss adjuster who determines the rebuild cost is £220,000. The insurer applies proportional underinsurance — since the property was insured for 173% of rebuild cost, but the claim is assessed against actual rebuild value, the claim of £85,000 (kitchen, structural damage, alternative accommodation) is paid in full.
In this case the error worked in his favour. However, in rural or specialist properties, rebuild costs frequently exceed market value. A Grade II listed farmhouse worth £500,000 on the market might cost £650,000 to rebuild — meaning a sum insured based on market value leaves a £150,000 gap.
Always use a rebuild cost estimate, not the market price.
Add-ons worth considering
| Add-on | What it adds | Typical cost | Worth it? |
|---|---|---|---|
| Accidental damage | Spills, breakages, DIY mishaps | £30–£70/year | Yes for families |
| Legal expenses | Employment, property, personal disputes | £20–£40/year | Often good value |
| Home emergency | Call-out for boiler, drains, locks | £40–£80/year | Depends on home age |
| Bicycle cover | Away from home theft | £30–£80/year | Yes if high-value bike |
| Specified high-value items | Rings, watches, art, instruments | Varies | Necessary above limits |
Landlord insurance — why it is different
If you let a property, standard home insurance is invalid. Landlord insurance covers:
- Damage caused by tenants
- Loss of rental income if the property is uninhabitable
- Property owner’s liability (if a tenant is injured due to property condition)
- Accidental or malicious damage by tenants (if added)
Standard landlord buildings insurance typically costs £180–£350/year. Furnished properties may also need landlord contents cover.
How to claim on home insurance
- Report incidents to the police first if criminal (theft, vandalism) — get a crime reference number
- Take photographs of all damage before moving anything
- Contact your insurer promptly — most policies require notification within a reasonable timeframe
- Keep all receipts for emergency repairs (e.g. boarding up a broken window)
- Do not throw damaged items away until the insurer has assessed them
- If the claim is disputed, request written reasons and escalate to the Financial Ombudsman Service (FOS) if unresolved within 8 weeks
Cluster articles in this section
- Home Insurance Guide UK
- Best Home Insurance UK 2026
- Buildings Insurance Guide
- Contents Insurance Guide
- Should I Get Contents Insurance as a Renter?
- Landlord Insurance Guide
- Home Emergency Cover Guide
- How to Claim on Home Insurance UK
Related hubs
- Life Insurance Hub — life, critical illness, and income protection
- Car Insurance Hub — motor cover, premiums, and switching
- Mortgages Hub — home buying, remortgaging, buy-to-let
- Life Events Hub — financial planning for moving home, bereavement