Buildings & Contents

In this page:

  • Buildings Insurance
  • How to calculate the amount of Buildings & Contents cover you need
  • How to cut the cost

Buildings insurance
If you have a mortgage, you will have no choice but to have buildings insurance. And your lender will probably be only too keen to provide it - at a cost.

It is usually wise, however, to shop around through brokers, the internet and individual companies, as the amount you will be asked to pay for the same cover will vary widely.

*You need to insure the rebuilding cost, not the value of your property.

Premiums will be lower for detached houses, and higher for terraced houses and flats. Your mortgage lender will tell you how much to insure when you take out your loan. Otherwise, ask a surveyor.

You will generally be covered for fire, flood, water damage and other hazards. Malicious acts, such as vandalism, may also be included. Accidental damage is usually an optional extra, with family legal protection another possible add-on.
You may get a discount if you buy combined building and contents insurance and also if your home meets your insurer's security requirements, including specific types of window and door locks. It may also be beneficial to agree to a deal lasting more than one year, although it is a good idea to include an opt-out if rates are increased.

How to calculate the amount of Buildings & Contents cover you need
The sum insured - the total amount of money for which your contents are covered - is the maximum amount your insurer will pay out. By the time your claim is processed and wear and tear and any excesses have been taken into account, it may be considerably less.

1. Draw up a checklist

  • If you are underinsured, you may end up spending quite a lot of your own money to replace your possessions.
  • It is your responsibility to calculate adequately the value of your possessions, so make sure you get it right.
  • Go through all the rooms in your house, including lofts, storage rooms and garages, and write down what it would cost to replace them with brand new items at today's prices.
  • If you have particularly valuable items that are hard to price, such as works of art or antiques, itís worth getting a professional valuation and listing them as a specified item with your insurer.
  • If an item is worth a considerable sum it may be excluded from contents insurance and you will have to go to a specialist insurer as well.
  • If you buy anything new, especially something expensive, like a television or computer, make sure you tell your insurer.
  • All-risks insurance will protect certain items, such as skis or musical equipment, which you take outside the home. There are often limits to the amount of cover available when away from home, however, so check the policy details.

2. Make the right calculations

  • A handful of insurers still calculate home contents cover on the number of rooms in the house, although these policies are becoming less popular.
  • If you want to take out this kind cover, make sure the overall sum accurately reflects the value of your possessions.
  • It is vital to calculate the full cost of rebuilding your home when buying a building insurance policy as the sum insured is the maximum your insurer will pay out under any circumstances. A chartered surveyor can calculate how much this would cost.
    However, it may be worth getting a new survey done every few years as the cost of rebuilding - in terms of both labour and materials - changes.
  • Check if your insurer "index links" your policy. This means your sum insured is automatically altered whenever there is a change in the rebuilding cost.
  • Similarly, it is important to tell your insurance company if you have made any improvements to your home, such as building an extension or fitting a top-of-the-range kitchen.

If you don't want to get a surveyor in, look at the Association of British Insurers' website. It has a form, based on guidelines from the Royal Institution of Chartered Surveyors, which helps you to calculate the cost of your home by yourself.

How to cut the cost
The premium you will pay for home buildings or contents insurance can vary widely depending on what kind of cover you want, how big your house is, how valuable your possessions are, and where you live - postcodes play a huge part in the calculation of premium.

Burglar alarms
If you live in a postcode area with a high crime rate it's worth investing in a good security system.
Most insurers will offer you a discount if you have done this - although check with your insurer first as many companies insist the installation of alarms is carried out by companies registered with the National Approval Council for Security Systems.

Before they will cover you, some insurers insist you fit locks which they specify; others will reduce the premium.
The Association of British Insurers recommends fitting outside doors with deadlocks which conform to BS3621. These doors can only be opened with a key.
Inside locks and bolts are also a good idea, although remember they are only as strong as the door or the door frame, so check for weak or rotten wood.

Patio doors are particularly vulnerable. Glass panes can easily be removed and sliding doors can be lifted of their tracks. Fit them with extra security locks.

Accessible windows, those on the ground floor or near drainpipes and walls, should be fitted with key locks. Remember, most burglars enter through windows.

Community schemes
Joining a neighbourhood watch scheme would also lower your premium.

Flooding and subsidence
Areas that are prone to flooding or subsidence are also prone to higher insurance costs. Unfortunately there is not a lot you can do about this, beyond moving house and taking precautions once a flood warning has been issued. Moving valuable items upstairs and turning off stop cocks and electricity can minimise the damage.

Crime, flooding and subsidence can also affect the cost of building (bricks and mortar) insurance, although the size of your house is the biggest factor.