What are the advantages of home and contents insurance?

Owning and furnishing a home is pricey, so you might be reluctant to add insurance to your list of expenses. But there are many advantages of home and contents insurance that make it a thoroughly worthwhile purchase. There are also good reasons for taking out building and contents insurance together as a combined policy. Below, we take you through all the key benefits, plus a few things to watch out for as well.

But before we get into it, let’s quickly outline what we mean by home and contents insurance…

What do we mean by home and contents insurance?

When we’re talking about home and contents insurance, we could mean a couple of different things. Home insurance is actually an umbrella term for different types of insurance related to the home. The two main types are buildings insurance and contents insurance.

Contents insurance covers anything that would fall out if you tipped your home upside down. Buildings insurance covers the rest. They can be bought separately or as a combined policy (more on the advantages of this below).

Homeowners insurance is often fairly comprehensive. That means it may well include contents insurance as well as buildings insurance, but that’s not always the case. If it doesn’t include contents insurance, most people will take out separate contents cover as well. Whatever the exact set-up is, it’s about insuring your home and your belongings.

So, now that that’s cleared up, let’s dive into the various advantages…

Home and contents insurance manages risk

Our homes are constantly at risk from a huge number of potential threats – from natural disasters to fires, from theft to vandalism, from explosions to subsidence. Even though the chances might seem slim, there’s always the possibility that something could go wrong.

Home insurance is indispensable for managing this ongoing risk. Buildings insurance will protect the structure, fixtures, and fittings of your home against a whole list of perils. Meanwhile, contents insurance covers your personal belongings if they’re damaged or lost.

Read more: What does home insurance cover?

And home insurance isn’t just for events outside of your control. Some providers will also cover accidental damage (caused by DIY mishaps, for example), or you can pay a bit extra to have this included in your policy.

Not having insurance means taking a real gamble on your home and personal possessions.

Of course, insurance can’t stop disasters from striking any more than we can – but by taking out coverage we’re doing what we can to manage the risk. And if the worst does happen, we won’t end up significantly out of pocket…

Home and contents insurance provides financial security

Home insurance costs around £200 a year on average. But this is just a tiny fraction of what you’d likely need to pay if something happened to your home and you didn’t have insurance. For many of us, home and contents insurance covers us for repairs, replacements, and rebuilding we simply couldn’t afford ourselves. And even if we could afford it, it makes far more financial sense to use an insurance policy that costs next to nothing in comparison!

Property damage

Buildings insurance covers how much it would cost to rebuild your home from scratch. So, no matter how much damage your home sustains, your insurance should cover it. Given that our homes are usually our most expensive possessions by far, it’s highly unlikely we’d be able to afford the cost of significant issues ourselves out of pocket. So home insurance is essential protection against financial difficulty.

And it’s not just our main building that’s protected. Buildings insurance also includes any detached structures such as garden sheds, fences, and garages. This means our whole property is covered.

Liability

Home insurance also covers you for liability. This means that if someone gets hurt or their own belongings get damaged while on your property, you’ll be protected if they decide to take legal action. You’ll be insured for legal fees and for payouts such as medical bills, which can be eye-wateringly expensive.

Is it worth insuring contents?

While the financial security offered by contents insurance might seem less important than buildings insurance, it’s worth thinking about how many possessions we have, and how the costs stack up. You might be able to replace individual items using your own savings, but what if everything you owned was damaged or destroyed in one fell swoop?

And contents insurance doesn’t just apply to your home. It can also cover your belongings away from home. This can be particularly handy for valuables like mobile phones, jewellery, bikes, and musical instruments.

Other advantages of home and contents insurance

While risk and finances are probably the main advantages that come to mind when thinking about home and contents insurance, there are also plenty of other benefits…

Mortgage requirements

For one thing, having home insurance – specifically buildings insurance – will allow you to take out a mortgage. The vast majority of mortgages require you to have buildings insurance. This is because the lender is offering you a loan secured against the property, so they want to be sure it’s protected.

Emergency support 

Home insurance often includes home emergency cover, or allows you to add this as an optional extra. If something happens which makes your home unsafe to live in, home emergency cover will give you access to a 24/7 helpline and emergency call-outs. It may also cover the costs of any temporary accommodation you have to stay in, or your insurer might even arrange alternative accommodation for you. 

New for old

It depends on your policy, but most contents insurance will have “new for old” cover. Say you had a fridge that cost £100 when you bought it. But when it was destroyed in a flood, it was 10 years old and had some wear and tear, so it was only worth £50. Rather than only being able to claim £50 back, new for old would allow you to get a brand new fridge worth £100 – the value of your old fridge when you first bought it. Your insurer will either replace the item for you or give you the money to buy one yourself. So new for old cover is great for any of your belongings that’ll lose value over time.

Access to insurers’ suppliers

If your home requires repairs or other building work following an unforeseen event, it can be stressful trying to find a supplier. We might not know where best to look, or how to be sure their work is good quality. But insurance companies will likely have an established network of suppliers to call on. This means you can be sure they’re reliable.

On the other hand, if you do have a trusted supplier you’d like to use, most insurers will be fine with this. You usually just need to prove they won’t charge substantially more than the supplier your insurer would have used.

Peace of mind

Last but not least, home and contents insurance offers peace of mind. You can relax knowing that your precious home and treasured belongings are protected. And your bank account will also thank you, safe in the knowledge it won’t be facing any nasty surprises! By paying a small, pre-agreed amount regularly, you’ll avoid paying any large lump sums that hit you out of the blue.

What are the benefits of combined buildings and contents insurance?

Whether taken out together or separately, buildings and contents insurance both come with plenty of advantages to recommend them. But you might also be wondering what the benefits are of taking out a combined policy.

• Lower premiums – it often works out cheaper to take out one home insurance policy that combines buildings and contents cover. Insurance companies will usually provide a discount if you choose them for both. But that’s not always the case, so it’s worth comparing separate quotes with a combined policy to be sure you’re really getting your money’s worth.
• More streamlined – having a combined policy can mean less faff than two separate ones. With a lot of perils covered by home insurance, it’s likely that both the structure of your home and your belongings will be damaged. A combined policy means you only have to deal with one insurance provider and make one claim, rather than having to juggle two claims at once. It also means you’ll only need to pay one excess.

What are the disadvantages of home and contents insurance?

Although we’d highly recommend home and contents insurance due to all the advantages listed above, there are of course some things to watch out for as well:

• Exclusions. Keep in mind that home insurance policies won’t cover everything. Common exceptions include general wear and tear, damage caused by pets and pests, and issues due to the property being left unoccupied for too long.
• Optional extras. Some policies will automatically include things like home emergency cover and protection for your belongings when away from home. But other policies will make you pay extra for these, so it’s a good idea to compare a few different providers.
• Being over- or underinsured. Be careful when applying for a policy that your valuations are correct. Top tips include using the rebuild value of your house (which, for example, might be more than you paid for it but less than the current market value) and checking that any high-value belongings are adequately covered.

Using a trusted insurance broker – like us! – can help you navigate the things to watch out for, as well as make sure you don’t get caught out or end up with a poor deal.

Quick summary: is it worth having home insurance?

In short, yes! With all the advantages it brings, it’s easy to see why for many people having home and contents insurance is a no-brainer.

Home and contents insurance is a way to mitigate the various risks – in some cases catastrophic ones – that our homes are subject to. And it offers significant financial security for you and your most valuable assets. Not only that, but it provides a whole range of other benefits such as emergency support, access to trusted suppliers, and peace of mind.

There are also advantages to taking out combined building and contents insurance. It’s often cheaper, and it tends to streamline the whole process if you need to make a claim.

If you’re looking to take out home and contents insurance, our team at Howden can offer a tailored, personalised service to help you navigate what’s out there and find the best home insurance option for you.

CONTENTS INSURANCE GUIDES