Home insurance splits into two halves, and people regularly buy the wrong amount of each. Knowing the difference stops you paying for cover you do not need — or, worse, finding a gap when you claim.
Buildings insurance
This covers the structure itself: the walls, roof, floors, and permanent fixtures like the kitchen and bathroom. If a tree falls through the roof or a pipe bursts and ruins the plaster, buildings cover pays to repair it. If you have a mortgage, your lender will insist you hold it, because the property is their security.
Contents insurance
This covers your belongings — furniture, electronics, clothes, the things you would take with you if you moved. A rough test: turn the house upside down, and everything that falls out is contents. Tenants usually need only contents cover, because the landlord insures the building.
Who needs what
- Homeowners — both, often bundled together.
- Tenants — contents only.
- Leasehold flats — buildings cover is often handled by the freeholder through a service charge, so check before doubling up.
The underinsurance trap
The biggest mistake is guessing your contents are worth less than they are. Add up the real cost of replacing everything and the figure is usually higher than expected. If you insure for too little, insurers can scale down a payout proportionally, leaving you short exactly when you need the money. Spend ten minutes on an honest tally, and rebuild cover should be for the full cost of reconstruction, not the market value of the house.