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What’s the difference between buildings and contents insurance?

It may be tempting to gamble on home insurance, but is it wise to risk your house or possessions? If you do play safe, what type of cover should you choose?

There are three main types of household insurance policy. One that safeguards the structure of your home, another to look after your belongings and one that combines both, protecting you against accidents, damage, theft, natural disasters and third-party claims.

You can buy these separately with different providers or opt for a single insurer to cut down on administration and, probably, cost. Whichever policy you pick, be sure you know what it covers. Fortunately, there’s a simple rule of thumb. 

Generally speaking, things that can be carried out of your property comes under contents insurance. This includes things like curtains, white goods, furniture, gadgets and even the fish fingers in your freezer.

Buildings insurance, on the other hand, protects the fabric of your home, such as the roof, walls, windows and permanent fixtures like a fitted kitchen, garage, conservatory and outbuildings. Home insurance protects both your property’s structure and the items within it.

Home and contents insurance comparison

Your cover should reflect your lifestyle. Do you have children, own several computers, love your garden? Policies vary, so be prepared to research and compare buildings and contents insurance before you buy.

Check what’s included as standard and what optional extras are offered. Some policies appear more generous than others, so make a checklist. 

Marian Hartigan, who lives with her son in Lincolnshire, believes her research has paid off. “I intentionally looked for the most comprehensive combined buildings and contents policy. It seems you can never include everything, but I made sure that home emergency cover and alternative accommodation were standard in my policy, in case of local flooding. 

“As I travel frequently, I also opted for additional personal possessions cover away from the home for my watch, and being cynical, made sure I added legal expenses cover. Redress can be expensive and it would be difficult to estimate fees.”

Is building insurance compulsory?

No, it’s not compulsory, but most mortgage lenders insist on it as a condition of your loan. Again, if you’re in the process of buying a home you’ll need the insurance in place from the day you exchange contracts.

If you own the freehold to your property, buildings cover is recommended as the cost of repairing structural damage can be huge. If you own the freehold on a flat or maisonette, it’s a good idea to insure with other owners under a single buildings policy.

How much buildings insurance do I need?

You can work out how much insurance you need in different ways. The first is to make sure it covers the cost of rebuilding your house from scratch at today’s prices plus professional fees. This is not the same as your home’s market value.

If you’ve recently bought a property, the rebuild cost should be on your mortgage valuation or survey. Alternatively, you can use the Association of British Insurers’ (ABI’s) rebuild calculator or ask a chartered surveyor for a precise figure.

Bedroom rated insurance is another way to calculate cover and this hinges on the number of bedrooms you have. We offer an unlimited sum on our standard buildings and contents policies as well as our Premium tier AvivaPlus Home Insurance. 

How much contents insurance do I need?

It’s important you have enough coverage to protect what you own. As with buildings insurance, your policy could be based on the number of rooms you have.

This approach avoids calculating the value of your possessions and offers around £50,000 of protection as standard. Alternatively, you may be asked to choose the specific amount of cover you need.

Your worldly goods are usually worth more than you think. As Laura Hughes, ABI’s Senior Policy Adviser, General Insurance, says: “Spend a few minutes totting up the value of all your possessions and you’ll realise they can add up to a significant sum if they all need to be replaced at once.” In fact, according to the ABI, the average UK household now owns £35,000 worth of stuff 1

To estimate what it would cost to replace your possessions with new, like-for-like items, organise an inventory and work out the total amount.

Make a note of your most valuable or ‘high risk’ things, such as jewellery, as many policies limit the pay-out for a single item to between £1,500 and £2,000. List these separately and consider extra cover.

Making sure you have the right cover

When shopping around for home insurance, you should make sure that your policy has everything you need and is within your budget.

The following home insurance options may be offered as standard or an add-on so choose wisely – they could save your day:

  • Comprehensive accidental damage cover for contents and buildings
  • Personal possessions (all risks) cover away from home
  • Home emergency cover 
  • Cost of alternative accommodation
  • Legal services 
  • Special events at home (Christmas, birthdays, weddings)
  • Away from home cover for students at college
  • Trace and access for water or oil leaks

It's also worth checking you don't already have cover elsewhere, such as with your bank account. You don't want to pay twice for the same cover!

Another factor to consider is the excess charge. This figure represents how much you pay towards any claim and generally, the higher your voluntary excess, the lower your premium. 

When looking for the right policy, it’s worth remembering that some companies, aren't on comparison websites. So check directly to make sure you get the best deal.

Need some cover?

Explore our home insurance page to learn more about our AvivaPlus Home Insurance, Building Insurance and Contents Insurance.

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