There are many different types of insurance available in the UK.
It can be confusing to remember what each type of insurance covers.
A common point of confusion is about the difference between building insurance and home insurance.
Are they the same thing – and if not, what is the difference?
Read on to find out.
Is building insurance the same as home insurance?
In short: building insurance is a type of home insurance.
The other type of home insurance is contents insurance.
So, home insurance is the overarching name for both building and contents insurance.
What is building insurance?
Building insurance covers the structure of your home as well as any fixtures and fittings.
Depending on the policy, this will sometimes include things such as fitted kitchens and bathroom suites. It will also typically cover:
- Sheds
- Garages
- Fences
- Drains
- Pipes
- Cables.
These items are considered part of the house’s structure, which is why they are covered in building insurance.
Building insurance and landlords
Building insurance is essential for landlords because it protects them if something goes wrong while renting a property out.
Tenants only need to cover their belongings because the landlord looks after the buildings cover.
How much to insure your building for
When you take out building insurance, you should insure yourself for the amount it would cost to rebuild your home completely.
You should also remember that rebuild costs will typically increase over time.
So, reviewing the amount your building insurance covers regularly is important.
Building insurance and extensions
Furthermore, if you carry out extensions on your property, the rebuild costs will also likely increase.
This will once again require a reassessment of your building insurance.
Mortgage lenders and building insurance
If you’re taking out a mortgage, your lender will probably insist you get buildings insurance before they loan you the money.
What is home insurance?
Home insurance comes in two forms: building insurance and contents insurance.
You can also get a combined home insurance policy, which includes both. This is usually cheaper than having two separate policies.
Remember that the price you pay will vary on:
- The value of items in your property
- The material your home is constructed of
- Its location.
And more.
Is home insurance a legal requirement?
Home insurance is not a legal requirement, but it is advisable. It provides you with essential cover if your house is destroyed.
What does home insurance not cover?
There are a few things which home insurance does not typically cover in the UK. This usually includes:
- Typical ‘wear and tear’ on a property
- Unoccupied properties
- Instances of incorrectly supplied information
- Negligence
- Lack of maintenance.
It’s worth noting that buyers are usually responsible for home insurance during a house sale after contracts have been exchanged.
Before making assumptions, it is essential to check with your insurer to.
How much does home insurance cost?
According to MoneySupermarket, the average combined home and contents insurance policy costs £140 a year last year.
You can take a few steps to get cheaper home insurance quotes. These include:
- Pay annually
- Pay more excess
- Get quotes from many different insurers
- Improve home security
- Build up your no-claims discount
- Keep your house occupied.
You can usually access a no-claims discount when you go multiple years without making a claim.
This is when your home insurance quotes may start to go down noticeably.
