Home Insurance: FAQs

Q. Is home insurance a legal requirement?

A. It’s not a legal requirement in the UK for property owners to get house insurance. However, your mortgage provider will more than likely require you to have at least buildings insurance as part of the loan agreement in order to protect their financial interest in the property.

If you own your home outright (without a mortgage), again you do not need to have home insurance. It’s important to think about though, as without it you’re responsible for all repairs or rebuild costs.

Q. Do I need home insurance if I rent?

A. If you rent a property, it depends on your landlord or freeholder whether you need buildings insurance. Have a chat with them or check your rental agreement to see what if you need to do anything. You might want to look into contents only insurance for your personal belongings anyway.

Q. What’s the difference between buildings and contents insurance?

A. A buildings insurance policy covers the actual structure of your home, including walls, windows and doors, as well as fitted fixtures like kitchens or bathrooms. Contents only insurance typically includes cover for everything you would take with you if you moved home. So it’s for things like furniture, TVs, computers, clothes, kitchen appliances, and valuables. More information can be found on our Home Insurance page.

Q. Do home insurance policies cover wear and tear?

A. No, they don’t. The gradual deterioration of the property and its contents over time, or due to use, is expected. Insurance is intended for unforeseen events, so things wearing out or failing due to improper maintenance isn’t covered.

Q. What does ‘new for old’ mean?

A. ‘New for old’ means exactly that. If your possessions are stolen or damaged, your insurance company will pay to replace them with a new item of equivalent value. So your old item is replaced with a new one.

For example: Your 5-year-old television is damaged beyond repair due to a covered event. It cost £300 when you bought it, so the insurance company will pay £300 for a new one, rather than the £5 it’s worth now. This is regardless of how long you’ve owned the TV.

Q. What affects the cost of home insurance?

A. There are a number of things insurers consider when you’re looking for a quote:

  • Location: The likelihood of floods, crime rates, number of claims in your area.
  • Size: The bigger your house, the higher the payout is likely to be.
  • Age: Older houses might be more difficult to repair, which could also increase the claim amount.
  • Security: The more secure your home is, the less likely it is to be burgled or vandalised.
  • Contents value: A large amount of items, or multiple high-value items, can result in a higher payout if an insurer has to replace them.
  • Children or pets: Either of these might increase the likelihood of damage to your contents, which in turn can increase the likelihood of a claim.
  • Claims: Your previous claims history might mean an insurer expects you to claim again.
  • Level of cover: A more comprehensive policy with add-ons will increase your premium.

Q. What’s the difference between the market value and the rebuilding cost of my house?

A. When it comes to getting a quote, you’ll be asked to input the value of your house. When you do, it’s important not to use the market value, but instead the rebuild value. This is because the rebuild costs will cover things like clearing the site, additional fees, specific materials, and architectural features of the building. The market value is simply the cost of purchasing the house as it stands. Bear in mind that some insurers now impose a maximum rebuild cost, so the policies might not be suitable if you have a high-value property, like a listed building.

You can find out the rebuild cost of your property by getting a qualified surveyor in to work out the cost. Otherwise, if you’ve recently bought your house, this will be on your mortgage valuation.

Other home insurance articles which you may be interested in...

Home Insurance: Optional Extras Home Insurance: Optional Extras - There's lots to consider when getting a home insurance policy. Consider if you need add-ons for comprehensive coverage.
Tenant's Insurance Tenant's Insurance - Tenants insurers, renters insurance, or contents only insurance is for those are not the homeowners of their property.
Home Insurance: Help & Hints Home Insurance: Help & Hints - Useful information on how to keep your home insurance premiums low.