Home Insurance Explained: Buildings vs Contents

Key takeaway

Buildings insurance covers the structure of your home (walls, roof, floors, fitted kitchens). Contents insurance covers your belongings inside. Homeowners usually need both; renters only need contents. Most policies have an excess of £100-£500 you pay on each claim.

Home insurance splits into two separate policies that do different things. You can buy them together as combined cover or separately. Which you need depends on whether you own or rent.

Buildings Insurance

This covers the permanent structure of your home:

Walls, roof, floors, ceilings
Windows and doors
Fitted kitchen and bathroom
Built-in wardrobes
Garage and outbuildings
Driveways and paths
Fences and gates
Pipes and wiring

If a fire destroys your house or a storm rips off the roof, buildings insurance pays to repair or rebuild.

Typical cost: £200-£400 per year for an average house (average around £240 buildings-only).

How Much Cover Do You Need?

Buildings insurance should cover the rebuild cost, not the market value. Your house might sell for £350,000 but only cost £200,000 to rebuild from scratch. The land value and location premium don’t matter - you’re insuring bricks and mortar.

Most insurers estimate rebuild costs based on property details you provide. The Association of British Insurers has a calculator on their website, or get a surveyor to assess it properly.

Underinsuring is risky. If you’re insured for £150,000 but the rebuild cost is £200,000, your payout might be reduced proportionally. Some policies cover this gap; many don’t.

Contents Insurance

This covers your belongings:

Furniture and furnishings
Electrical items (TV, computers, phones)
Clothes and shoes
Kitchen appliances (freestanding ones)
Jewellery and watches
Books, music, games
Bicycles
Garden furniture and tools

If someone breaks in and steals your laptop, or a burst pipe ruins your sofa, contents insurance pays out.

Typical cost: £80-£200 per year depending on cover level and where you live (average around £106 contents-only). A combined buildings and contents policy averages around £375.

Valuing Your Contents

Add up what it would cost to replace everything you own. People usually underestimate this. Walk through each room and tot it up:

Room	Typical Contents Value
Living room	£3,000-£8,000
Kitchen	£2,000-£5,000
Main bedroom	£3,000-£6,000
Other bedrooms	£1,500-£4,000 each
Bathroom	£500-£1,500
Garage/shed	£1,000-£3,000

Most households need £30,000-£60,000 of contents cover. Underinsure and the same proportional reduction applies as buildings.

What’s Covered and What Isn’t

Standard policies typically cover:

Covered	Usually Not Covered
Fire and smoke damage	Wear and tear
Theft and attempted theft	Gradual damage
Storm and flood	Unforced entry (left door unlocked)
Escape of water (burst pipes)	Damage by pets
Vandalism	Deliberate damage
Falling trees	War and terrorism
Subsidence	Business equipment

Read the policy wording. Exclusions vary between insurers.

Accidental Damage Cover

Standard policies cover specific events (fire, theft, flood). Accidental damage adds cover for:

Spilling wine on the carpet
Drilling through a pipe
Children putting a ball through a window
Dropping your TV

This costs extra - usually £20-£50 per year. Worth it if you’re clumsy or have young children.

Away From Home Cover

Some contents policies only cover items inside your home. Others include:

Personal possessions - Cover for items you take out (laptop, phone, bike, camera). Usually has a single-item limit of £1,500-£2,500.

Student possessions - Cover for children’s belongings at university.

Garden cover - Items in your garden (furniture, plants, ornaments).

Check what’s included. If you regularly carry expensive items, you might need to add them specifically.

High-Value Items

Most policies limit payouts for single items. Typical limits:

Category	Standard Limit
Single item	£1,500-£2,500
Total jewellery	£5,000-£10,000
Total cash	£250-£500
Bicycles	£500-£1,000

If you own a £4,000 engagement ring or a £3,000 bicycle, tell your insurer. You’ll need to specify these items and pay a higher premium.

The Excess

Every claim has an excess - the amount you pay yourself before the insurer pays anything.

Voluntary excess - You choose this. Higher excess = lower premium. Common options are £0, £100, £250, £500.

Compulsory excess - The insurer sets this. You pay it on top of your voluntary excess.

So if your voluntary excess is £250 and compulsory is £100, you pay £350 on every claim.

Subsidence excess is much higher - typically £1,000 to £2,500. It’s a major risk for insurers.

Who Needs What

Situation	Buildings	Contents
Homeowner (mortgage)	Required	Recommended
Homeowner (no mortgage)	Recommended	Recommended
Renter	No	Yes
Lodger	No	Maybe
Leaseholder (flat)	Check lease	Yes

Mortgage lenders require buildings insurance. They have a financial stake in your property not burning down.

Flat leaseholders often find buildings insurance is handled through the building’s management - check your service charges.

Making a Claim

If something happens:

Prevent further damage - Cover a broken window, turn off water for a leak
Report crimes to police - You’ll need a crime reference number for theft
Contact your insurer quickly - Most require notification within 24-48 hours
Document everything - Photos, receipts, lists of damaged items
Get quotes - For repairs or replacements
Don’t throw things away - Insurers may want to inspect damaged items

Small claims affect your premium more than they’re worth. Consider whether a £400 claim is worth a few years of higher premiums.

Saving on Premiums

Ways to reduce costs:

Increase your voluntary excess
Pay annually instead of monthly (avoids interest)
Improve home security (alarms, locks)
Choose a higher excess
Bundle buildings and contents together
Check if you qualify for any discounts (new customer, loyalty, profession)
Compare prices annually - loyalty rarely pays

Comparison sites show most of the market. Go direct to a few insurers too, as some don’t appear on comparison sites.