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The Basics Of Home Insurance In Britain

Modern UK homes that have home insurance policies taken out on them

It has been calculated that the average home in the UK contains belongings worth an estimated £35,000, a figure which is significantly higher than the average annual salary of £27,000. Despite the protection offered by such policies, 7.5 million homes in the UK have no home contents insurance. In this article we look at:

  • What home insurance is
  • What home insurance covers
  • How much home insurance costs
  • Reducing the cost of your home insurance

What is home insurance?

There are two types of home insurance policies: buildings and home contents. Buildings insurance covers the cost of any structural damage to the property as well as to its fixtures and fittings. Having this type of insurance is a prerequisite for anyone with a mortgage. If you’re in rented accommodation, this policy is the responsibility of your landlord.

7.5 million homes in the UK have no home contents insurance

Home contents insurance covers the damage, loss or theft of your personal belongings including furniture, electronic devices, electrical appliances, etc.

What does home insurance cover?

Policies may vary slightly in the cover they offer, but generally home insurance covers any damage caused by adverse weather conditions, fire, theft, flooding and problems like subsistence. Most policies don’t cover damage which was the direct result of the property not being properly maintained, nor for damage which occurred when the property was unoccupied for 30-60 days.

You can add optional extras to this basic policy such as covering:

  • accidental damage
  • personal belongings (for possessions often taken out of the home such as mobile devices)
  • valuable items such as jewellery which exceed the single item limit
  • legal expenses
  • working from home

A detached UK home with a garage. It has a home insurance policy taken out on it.

How much is home insurance?

The price of home insurance depend on factors like:

  • where you live
  • the size/condition of your home
  • the value of your possessions
  • the extent of your coverage
  • the size of your excess (your financial contribution to any claim before the insurer has to pay)
  • the pay-out for any previous claims (if any)

The average cost of a buildings insurance policy is £265 per year while the annual average cost of a home contents policy is £138. Although you can purchase these two policies from different insurers, many people prefer to take out a joint policy from the same provider as they’re entitled to a discount. The average yearly cost of a joint buildings/home contents policy is £309.

How can you reduce your home insurance?

Apart from increasing your excess and opting for less comprehensive cover, there are a number of ways you can reduce how much you pay for your insurance. One way is to pay every year in one lump sum instead of in monthly instalments. You can make savings of around 6% a year in this way.

Many insurance providers will also offer discounts if your home contains basic security devices such as fire, smoke and burglar alarms. Similarly, installing approved window and door locks will also reduce your insurance premiums.

Is home insurance tax deductible?

Unless you’re self-employed and run a business from your home, or you are a landlord who rents out property, the cost of your insurance premiums isn’t tax deductible.

About the author

Megan Walsh

Megan, a former employee of over 20 years in the insurance industry, is devoted to sharing her valuable insights on familymoney.co.uk

Apart from her interest in insurance, Megan also enjoys painting, gardening and keeping up with current affairs.

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