Is home insurance mandatory in the UK?

Our homes are usually our most valuable possessions, so it’s vital to make sure they’re protected properly. But is home insurance mandatory in the UK? Do you need home insurance?

The answer to this depends on your circumstances — for example, whether you’re a homeowner with or without a mortgage, or whether you’re a leaseholder, a landlord, or a tenant. But regardless of whether you’re required to or not, we strongly recommend taking out home insurance for the financial security and peace of mind it affords. 

Let’s explore home insurance in a bit more detail.

The legal perspective on home insurance

In fact, home insurance is an umbrella term for various kinds of insurance. The most common ones are buildings insurance and contents insurance:

• Buildings insurance: This covers the structure of your home, including all its fixtures and fittings. It can also include things like fences and garden sheds. 
• Contents insurance: This covers your moveable belongings like your furniture, appliances, clothes, and decorations.

The easiest way to distinguish between buildings and contents insurance is to imagine turning your home upside down and giving it a shake. Anything that falls out would be covered by contents insurance, while the rest would come under buildings insurance. You can buy them separately, but it often works out cheaper to get both under a combined home insurance policy. 

In the UK, “home insurance” isn’t a legal requirement. But buildings insurance usually is, especially if you have a mortgage. Contents insurance is always optional, but definitely still worth taking out (as we’ll explain below).

Is home insurance mandatory if you have a mortgage?

Although it’s not required by law, home insurance — more specifically buildings insurance — is normally a condition for taking out a mortgage.

Mortgage lenders make buildings insurance mandatory because they’re lending you their money and securing it against your home. This means that they want to be sure the property will be protected against damage and criminal activity. 

You’ll need to take out buildings insurance when you become legally responsible for the property, so once you exchange contracts. Even if you haven’t moved in yet, any damage to the property after that point is down to you to insure against and fix.

What if you don’t have home insurance?

If you have a mortgage but no buildings insurance — for example because your policy has lapsed or because you didn’t take out cover in the first place — the consequences can unfortunately be pretty severe. You’ll be in breach of the terms of your mortgage, which means your lender could decide to increase the price, change the terms, or even put your loan into default. 

And if you don’t have insurance and something happens to your home, you’ll have to cover the costs of repairing the damage yourself. According to the Association of British Insurers, insurance companies paid out a whopping £2.55 billion for home insurance claims in 2023. So not having insurance cover could put you seriously out of pocket and affect your ability to meet your regular mortgage payments. In the worst-case scenario, you could even lose your home.

What if you own the property outright?

If you’ve paid off your mortgage and now own your home outright, you’re no longer required to have buildings insurance. 

However, as with all the other scenarios we’re covering in this guide, we’d still highly recommend taking out home insurance — both buildings and contents cover. After all, if serious damage was done to your property or belongings, would you be able (or want) to cover the cost of repairs, replacements, or rebuilding on your own? 

What happens if you own a leasehold?

Leaseholds — which are common with flats and maisonettes — tend to be a bit more complicated than freeholds. 

In many cases, the person who owns the freehold will be responsible for making sure the building is insured. If so, they’ll likely ask you to pay a contribution towards this as part of your service charge. But it’s possible that you might be responsible for sorting buildings insurance yourself, for example:

• If it’s a condition of your mortgage — for example, to take out buildings insurance with a specific provider
• If you co-own the leasehold alongside others in the building, such as in an apartment block

In the latter instance, you’ll need to negotiate with your neighbours to agree on buildings insurance and how to manage it between you. 

Is home insurance compulsory if you’re a landlord or tenant?

Another common scenario to consider is rental properties, whether you’re a landlord or a tenant. 

Home insurance and landlords

Landlords aren’t legally required to have home insurance cover. But as with owner-occupiers, if you’re a landlord and have a mortgage, buildings insurance will usually be a mandatory requirement for that mortgage. 

However, tenants don’t tend to be covered under standard home insurance. You’ll likely need to take out some form of landlord insurance to make sure your property is protected. 

Landlord insurance covers the structure, fittings, and fixtures of your property like buildings insurance does. It’ll also include things like:

• Cover for loss of rent, for example if a home emergency means your tenants have to move into temporary accommodation
• Cover in case your tenants damage the property
• Cover in case your tenants are injured due to an issue with the property

As with other homeowners, if you’ve paid off your mortgage, you don’t need to take out buildings insurance anymore. But it’s still highly recommended to help you cover the costs in case of any damage. If your property is furnished, you’ll also want to make sure your contents are insured. 

Home insurance and tenants: is home insurance mandatory when renting?

If you’re a tenant, buildings insurance is normally the responsibility of your landlord, so you don’t have to worry about getting that sorted. This is the case regardless of whether they’re a private landlord, your local council, or a housing association. But always double check your tenancy agreement to make sure your landlord has it covered. 

If you’re living in a furnished or partially furnished property, the landlord might also take out contents insurance to protect their white goods, furniture, and other belongings. We’d still recommend taking out your own contents insurance though to cover your personal items. And of course if you’re furnishing the property yourself, contents insurance is definitely a wise choice. 

Another great option is tenants’ contents insurance, which is designed specifically for renters. This often includes tenants’ liability cover, which protects you in case of accidental damage to your landlord’s property and belongings.

If you’re sharing with other tenants, you could take out a policy with them or on your own, depending on your preference. If you decide to share a joint policy with others, keep in mind that any of you can make a claim on the policy, which could impact your premiums or no-claims bonus!

Read more: Is the landlord or tenant responsible for buildings insurance?

Why is it important to have home insurance?

While buildings insurance isn’t always mandatory, and contents insurance never is, it’s always sensible to take out the relevant home insurance for your specific situation. There are a number of key reasons why:

• Financial security: Above all else, having home insurance makes financial sense. An insurance policy might set you back a couple hundred pounds each year, but that’s nothing compared to how much you’d likely need to fork out if your home and possessions were damaged, stolen, or destroyed.

• Risk management: In the UK, our homes are particularly vulnerable to floods and storms. Just look at the damage caused by weather events in recent years, for example Storm Babet. And the Association of British Insurers reported that weather-related claims hit a record high in 2023. Similarly, other incidents like fires and thefts sadly happen all too often. Home insurance protects you against all of these risks.

• Sentimental value: Our homes and belongings are special to us, with lots of cherished memories attached to them. By taking out cover, you’ll be insuring your future, so you can afford to keep your home and all its significance.

• Peace of mind: We all want to enjoy our homes and feel safe living there. Home insurance gives you peace of mind knowing that, should the worst happen, you’ll be protected.

Quickfire summary

Home insurance isn’t mandatory, but it is still important to have in place.

Home insurance is an umbrella term that typically refers to both buildings insurance and contents insurance. While buildings insurance isn’t a legal requirement, your mortgage lender will likely make it a mandatory part of your mortgage. Contents insurance isn’t compulsory either, but it’s worth weighing up the cost of insurance versus the cost of replacing your belongings in the event of a storm, fire, or break-in.

Whatever type of home insurance you’re after, our team of trusted experts can help you find the best policy for you. Make use of our personalised home insurance service today.

Also read:

• What does home insurance cover? 
• Building insurance costs: The lowdown
• Here’s why your home insurance claim could be rejected

READ MORE HOME INSURANCE GUIDES