Do I really need home insurance?

Thankfully, we don’t see many earthquakes in the UK or much civil unrest. But burst pipes, a foot through the loft floor, red wine on cream carpets – that’s a different story. 

We’re always told to expect the unexpected so if there is no place like home, isn’t it worth paying for peace of mind? 

According to the Association of British Insurers (ABI), the cost of protecting your property is falling 1, with the weekly price of home contents cover almost half the average amount spent on takeaways. But some people still run the risk, with one in four UK households choosing not to insure their possessions. 

This is despite the ABI revealing, in 2018, that a typical UK household has belongings totalling almost £35,000 2

“Anecdotally, fewer people have contents insurance because either they forget about it or they’re prepared to cover any losses themselves,” says Aviva’s Digital Propositions Manager, Nick Gibbs. “But if you can’t afford to do that, it’s sensible to have a policy in place.”

How does home insurance work?

Essentially, buildings cover looks after your bricks and mortar plus any permanent fixtures, while contents insurance protects your worldly goods. They can be bought separately or as a combined policy.

What does home insurance cover?

It will insure you against flood, fire and theft. Home insurance will protect you against events outside of your control such as explosions, earthquakes, civil unrest, frost and smoke damage, trees or branches falling on your house or your roof peeling off in high winds. It also protects you against third-party claims.

This isn’t an exhaustive list, however, and you should check the policy for full coverage options.

There’s the option of adding accidental damage or home emergency cover. Accidental damage accounts for most of our pay-outs – 42% according to the Aviva UK 2018 claims report. 

When it comes to contents, know how far your insurance stretches. Nick explains: “A common misconception is that it covers everything inside and outside the house, but that isn’t the case. First and foremost, it’s about the contents of your home. If there are items you take beyond the garden, make sure they’re added to your policy.” 

Peter, 46, from Lancashire found this out while on honeymoon in Italy. “I’d slimmed down before getting married and went swimming without giving my wedding ring a second thought. It slipped off somewhere in the Adriatic Sea – my wife was devastated. And because we’d spent thousands on the wedding, we couldn’t afford a like-for-like replacement.”

It’s a familiar story. Wedding and engagement rings, valuable heirlooms, family treasures… consider protecting them, even if sentiment says they’re irreplaceable.

Is home insurance mandatory?

“No, but it’s a good idea,” says Nick. “There was a time when mortgage companies would insist on buildings insurance to protect the fabric of your home, but that seems to have waned over the years. However, they are likely to issue some strong advice as you’re liable to pay your mortgage even if your house is destroyed.

“Building issues can be significant, so typical claims can run to several thousand pounds. Take escaping water, for example, there’s fixing the problem; damage to floors, carpets and plasterwork; staying in a hotel… the costs can spiral.” 

What should I consider when buying a home insurance policy?

Make sure your home insurance policy gives you the cover you need. Think about your circumstances and how much you want to spend. You can often reduce the excess – the amount you pay on any claim – if you’re happy to accept a higher premium. And vice versa, increasing your excess could lower your premium.

For buildings insurance, one of the important things is the rebuild cost of your house, not its sale price. 

What is the home insurance rebuild cost?

“It’s how much it would cost to rebuild the house if it was destroyed,” Nick explains.

Check out the ABI’s residential rebuilding cost calculator, developed with the Building Cost Information Service of the Royal Institution of Chartered Surveyors.

Do I need buildings insurance if I own my home outright?

No, but it’s still worth giving it some consideration. Whether you have a mortgage or not, you could face a huge bill if something goes wrong.

Do I need cover if I’m renting?

The landlord will take care of your buildings cover, but you might want to insure your belongings. An Aviva study from July 2019 revealed only two in five rented households have home contents cover.

Our Tenants and Renters Insurance protects, among other things, gadgets, travel tickets, gift vouchers, clothes and even the food in your freezer.

“If people are renting because they’re just setting up on their own, they might not feel it’s worthwhile as there could be other things they want to spend their money on,” Nick continues. “And they may not have many luxury items.”

But often, policies will include some level of tenants’ liability provision that covers damage to the landlord’s property – never a bad thing to have.

How many home insurance claims are successful?

Our 2018 claims report shows there were 87,609 claims in 2017 and 95.2% were approved. 

Every year, we pay for enough carpet to cover 11 football pitches. If you piled up all the dishwashers, washing machines and dryers we replaced in 2017, it would be as tall as the Gherkin.

Do you need home insurance?

You’ll never know what’s around the corner; the ABI estimates that providers pay out some £8 million 3 a day to reimburse homeowners for damage and loss. But whether you opt for insurance or decide to cover any eventualities yourself, it pays to have a plan. 

Call it solid foundations for the future.

Ready to get cover?

With Aviva Home Insurance you can choose Buildings, Contents or both.