What is the difference between buildings and contents cover?

Posted on January 29, 2013 by Guest Writer
What is the difference between home and contents insurance

Having good home insurance cover is essential when you own your property. Buildings and contents insurance both cover your home and the things in it.

Home insurance takes the form of either buildings or contents insurance, or a combined policy which includes both. Buildings insurance covers the structure of your home as well as any fitted fixtures, out-buildings and anything permanently attached to your home. Contents insurance covers the items within your home including everything from furniture and electronics to clothing and freezer contents.

According to the Association of British Insurers 1 in 10 home owners make an insurance claim each year, reinforcing the need for adequate cover. A high quality policy can provide cover in a wide range of circumstances, including the theft or accidental damage of valuables, loss of keys or even alternative accommodation if your home is severely damaged.

Invariably the cost of replacing or repairing your building and your valuables far outweighs the cost of a combined home and contents insurance policy, making it essential for many people who want to protect their most precious assets.

Why is buildings insurance important?

Buildings insurance is not a mandatory requirement in the UK, but it might as well be. Most people would not leave their home unprotected, knowing that if something should happen they could be left severely out of pocket and, potentially, with nowhere to live. Furthermore, it can be very difficult to get a mortgage without having a good buildings insurance policy as it is a compulsory stipulation for many mortgage lenders.

What does buildings insurance cover?

Buildings insurance covers the bricks and mortar part of the home, which includes fitted fixtures as well as any outbuildings. It does not cover the value of the home, but looks at how much it would cost to literally rebuild the property from scratch, including labour and materials.

This means that if the house is damaged or destroyed in a natural disaster like a fire or a flood, or other natural events, buildings insurance will be invaluable. Having cover in place gives peace of mind when money is the last thing you want to be worrying about.

Why is contents insurance important?

Contents insurance is completely optional – unlike buildings cover it is not compulsory in any way. However, there is no denying that in case of an emergency like a burglary or flood, contents insurance is extremely useful. Without it, replacing your possessions could be costly.

What does contents insurance cover?

Put simply, contents insurance covers everything in your home that is not fixed and fitted against theft, loss or damage. While buildings insurance applies to everything that is stuck to your home, including things like fitted wardrobes and kitchen sinks, contents looks after those possessions that would fall out should you pick your house up and tip it upside down. This includes furniture, electrical goods, carpets and curtains.

When taking out a policy, it is essential that you provide a good assessment of your belongings. Being underinsured can turn out to be almost as bad as not having a policy at all and if something did go wrong, you might end up voiding the policy, or not being able to claim everything back.