If you own a house, you should take out buildings cover and contents cover to protect your home and belongings against risks such as theft, fire, flood and storm damage. If you have a mortgage it is usually a requirement of your home loan that you ensure that the building is adequately insured so that, in the event of its destruction or damage, it could be re-built or repaired. After all, if there is no home, your mortgage lender has no security against which to guarantee their loan and they could lose a lot of investment money if your house was destroyed with no insurance in place.
You can buy contents insurance and buildings insurance separately and you could spend time searching for the best price for each type. But many insurers offer discounts if you take out both buildings cover and contents cover with them (e.g. swiftcover.com offers a 25% discount for taking out buildings and contents cover combined, and if ever you had to claim against both elements you could do so and only have to pay one excess).
Contents insurance alone would pay for your personal belongings and furniture etc. (anything you would load into the van if you moved house) if they were damaged or destroyed (though not if they simply broke or stopped working due to normal wear-and-tear). The cover you’d need would be however much you think it would cost to replace your belongings on a new-for-old basis. This is perfectly acceptable if you are renting a property.
Buildings insurance alone would cover the fabric of the building in which you live (the bricks and mortar) and any fixtures and fittings (e.g. fitted kitchens, windows, doors etc.). The cover you would need would depend on the re-build cost (rather than the market value), which you can value by using the NHBC calculator online.
You can buy these policies separately, but many insurers will offer a discount or promotion if you agree to buy both policies through them. For instance, swiftcover.com will reduce the cost of buying your home insurance by 25% if you take out buildings and contents cover with them, and if you ever had to claim against both types (e.g. if a fire destroyed your home and possessions) then you would only have one excess to pay. This type of insurance is vital if you own a home.
Taking your buildings and contents home insurance from a single insurer can work out cheaper if a discount or other incentive is offered, plus it makes claiming and renewing much easier. You can tailor both types of policy to meet your needs by adjusting the level of cover and excess, and by adding different types of cover to the basic package that you think would be helpful to you (e.g. adding accidental damage cover, or personal possessions cover).
- This is a guest post by Greg Beck