By Rebecca and Tony | Edited by Johanna Updated August 2015
You can shave Ј100s off your home cover in minutes with our cost-cutting system.
What is home insurance?
There are three main home insurance policies: building, contents and combined building & contents cover. Buildings cover protects the structure, the fixtures and fittings in your home; while contents insurance covers your belongings.
Combined buildings & contents cover is only suitable for people who own their homes. If you rent, buildings cover should be handled by your landlord. Contents cover, however, is a policy that everyone should consider.
What is covered?
Included: What's usually protected?
The contents part of your insurance protects you against damage and theft to possessions in your home, garage and shed. The buildings part protects the structure of your home and permanent fixtures and fittings, such as doors and sanitary equipment (baths, basins, toilets and showers). It can differ from policy to policy, but home insurance will usually cover damage from storms, flooding, earthquakes, fire, lightning, explosions, theft, riots and vandalism. It also covers damage from falling trees, motor vehicles and escaping water (such as a burst pipe). Your cover should also protect you against subsidence (a shifting of the ground, which can cause your house to sink).
Most policies will also cover the cost of a hotel or B&B if you can't stay in your home following a fire or a flood, replacement keys and locks if they are damaged or your keys go missing, spoiled food if your freezer breaks down and the replacement of cash stolen from your home. There are limits on how much you can claim for, so if you're concerned about fancy frozen goods or you have cash hidden in your mattress, check your policy carefully.
Both contents and buildings policies give you legal liability protection as the occupier and owner, of the home. This means that as part of the contents policy, the insurer will cover you and your legal costs if a visitor to your home is seriously injured and it's deemed to be your fault. A buildings policy will do the same if the structure injures a passer-by or visitor, or damages a neighbour's property.
Excluded: What's often left out of cover?
Home insurance won't insure you against acts of terrorism. It also doesn't cover damage due to wear and tear. Your policy may also be invalid if your house is unoccupied for more than 30 consecutive days during the year (see unoccupied while away for more). There's also usually only limited cover for accidental damage (see accidental damage for more). Check the small print carefully before you buy.
Not being in your home can have consequences for your cover. If you sub-let your home, you won't be able to claim if you are burgled and there's no sign of forced entry. Or if you're away for a long time and a pipe bursts, your insurer may not pay out.
Insurers won't protect everything in your home just because you've bought cover - look out for situations where you'll need to make special arrangements. If you've a stash of high value items, there may be a limit on the insurance.
If you run a business from home, then that usually won't qualify for liability protection, while business-related contents may not be covered.
Accidents: What happens if I damage my home or its contents unintentionally?
Most people have probably accidentally smashed a window,
or broken a sink or other fixtures or fittings. Most standard policies usually cover you for limited accidental damage, such as a broken window.
Some contents will also be covered for accidental damage. Electrical goods may be insured for instance, but if you spill paint on your carpet, it's unlikely to be covered.
Many insurers offer extra cover for an additional cost. If you're particularly clumsy, you should give it some thought. Read your terms and conditions carefully to see what you are and aren't covered for as standard.
Outside the home: Will my policy cover my belongings away from the property?
Most policies don't cover contents outside the home as standard, but you can extend them so they do.
It'll cost a little bit more but you can usually get insurance for items such as your handbag, digital camera, smartphone and tablet both outside the home and overseas. As a rule of thumb, if it's designed to be taken out of the home, it'll fall under this extension.
As always, check your policy carefully. There may be limits to the cover and the items might have to be specifically mentioned in your policy documents.
Unoccupied while away: I'll be away from my property for a long time. Am I covered?
Once your home is unoccupied for more than 30 consecutive days, you're unlikely to be covered, or you may find your cover restricted. There are many reasons why you may leave your home unoccupied, but if you do, remember to tell your insurer.
It could be a holiday home, or you may be waiting to move into a new property. You could chose alternative policies, such as unoccupied home insurance (which can cover you for limited periods from at least three months) or holiday home cover.
Big ticket items: Is there a single item limit?
Your insurer will ask you for an estimated value of your contents. But pricey items, usually ranging from Ј750 to Ј2,000, have to be separately listed to be covered on many policies. Expensive purchases such as laptops and jewellery (including engagement rings) may not be covered if they were bought after your policy was taken out.
Even if your goods are valued under Ј750, some of them may not be covered, especially if they are mobile phones or tablets. A number of providers insist these items are specifically named on the policy, regardless of their value. After you buy something expensive, always check your policy carefully to ensure it's covered.
More and more people run micro-businesses from their homes. Whether your working equipment will be covered varies from policy to policy. Some insurers will cover your computer or work phone automatically, others may not. It's important to check with your insurer and notify it if you work from home - it might drastically affect your policy and could even invalidate your cover. Any business stock is usually excluded under a normal policy, so always check to see if you need specialist cover.
Christmas presents: Do I need extra cover for my festive gifts?
Many home insurers automatically increase your contents cover in December (and some even into January) at no cost but, if you need extra and your insurer does not up its limits as a matter of course, you may have to pay a small fee if you want to extend your cover. Some insurers will also increase your contents cover for other special occasions, such as religious festivals and weddings.