How Important Is Buildings And Contents Insurance?

Unlike motor insurance, home insurance isn’t a legal requirement, so it’s more common for homeowners to ask whether it’s worthwhile.

How important is buildings and contents insurance?

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Just because home insurance isn’t a legal requirement however, doesn’t mean that you can go without in every occasion. If you are buying your property with a mortgage, it is extremely common for the mortgage provider to request buildings insurance as a bare minimum. Until you have paid off your mortgage, the company effectively has a financial interest in the structure itself, and will want to ensure that their investment is protected. It’s extremely unlikely that they will insist on contents insurance, so you still have a choice to make here.

While making your decision, it may be worth thinking about the buildings the same way as your mortgage company. For a vast number of people, their home will be their single biggest financial outlay, and especially when buying your first home, may have taken several years to save up the deposit on. Leaving it exposed to matters that are often outside of your control – Fires, floods, storm damage etc. is probably not worth the risk.

For your contents, while less of a concern compared against the roof over your head, still make up a lot of your home comforts. It also includes the clothes that you wear, and will likely have been accumulated over a period of time. It isn’t until you go around and start to tally everything up that you start to realise just how expensive it can be. For example, a smartphone can cost upwards of £500, a new laptop can cost the same or more, and usually they will have to be low-priority compared to beds, sofas, clothing etc. It may take you a long time to get back to where you were before.

Here are a few other considerations:

Cost of insurance

It is worth noting that as a general rule, standard buildings and contents insurance isn’t that expensive in the grand scheme of things, and you can potentially arrange a buildings and contents policy for less than £20/month if paying over monthly instalments.

Please note that other factors may affect the amount that you pay, such as if the property is in a high subsidence or flood risk area, you have had previous claims, or the amount of cover you request is considered “above-average” but this is a rough indication, and is hopefully an amount you can work into your monthly budget.

Alternative Accommodation

If your house is badly damaged or even destroyed, and can’t be lived in for an extended period of time while it is repaired or rebuilt, then you and your family will need somewhere else to live.

Most policies provide cover for alternative accommodation, so if your home is unliveable, they will cover the cost of either a temporary rental, hotel or otherwise, during this time.

If you are under a mortgage, the payments don’t stop, and if you have to find money for a second rental on top, it may not be manageable for you financially.

Accidental Damage

When you’re living in a house every day, accidents can happen, and those can get expensive. For example spilling wine on a carpet may mean replacing the whole thing if you can’t get the stain out, or nailing through a wall pipe may mean taking away large amounts of plaster just to access and replace the damaged pipe, plus any damage the water may have caused before you can turn off the mains.

While both of these examples fall under the extended level of accidental damage which carries an extra premium, most policies come with a basic level of accidental damage cover that could be enough for your personal circumstances.

At GSI Insurance Services (Southern) Ltd. we have a number of buildings and contents schemes available to suit most budgets and requirements. Give us a call on 0800 612 9376 or click “Get a Quote” to fill in our online form.

Need some more information?

Why not read one of our other buildings and contents insurance guides?