Understanding the difference between buildings and contents insurance
There are many essential costs involved with living independently, such as rent or mortgage payments, council tax and energy bills. One that should be included in this list but can be overlooked is home insurance.
Although not a legal requirement, it can give you access to more favourable mortgage rates and provides valuable financial protection in emergencies.
Home insurance policies are usually split into buildings and contents cover, which can be purchased separately or together.
Your living situation and the nature of your property and possessions dictate your needs. Use this guide to discover the key differences between buildings and contents insurance and find the right fit.
What is buildings insurance?
As the name suggests, buildings insurance covers you for structural damage to your home. This could be broken roof tiles, smashed windows, corrupted pipes or crumbling walls.
Common reasons for structural damage include fires and extreme weather such as storms and floods.
Your insurance will cover the cost of repairs so you can replace vital components swiftly to ensure the continued security and liveability of your home.
What is contents insurance?
You can also safeguard your possessions with a home insurance policy specific to property contents. This relates exclusively to your belongings rather than the building itself.
Contents insurance will provide financial support should you need to replace your possessions following unavoidable events that aren’t your fault such as theft, loss or accidental damage.
When you take out the policy, you’ll need to give an accurate approximation of the cost of your home contents and information about door and window security such as the type of locks.
These details will influence the price of your premium and your compensation entitlements.
Do I need both types of insurance?
Calculate which types of home insurance you need by considering your living situation first and foremost.
If you are renting or have purchased an apartment in a managed building where you pay maintenance fees, you will not need to get buildings insurance. This will be arranged separately by your landlord as they are liable for structural restoration and repairs.
You should still protect your possessions with contents insurance though, and your belongs are your responsibility.
Do you own your property outright? You’ll need to have combined home insurance coverage.
Another consideration is mortgage providers. They will often ask whether or not buildings insurance is in place, and this can influence their decision to lend to you.
This is because your provider technically has a stake in the property until all the repayments have been made, and buildings insurance is important in protecting this asset.
