How to decide on the right home insurance

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Deciding on home insurance when buying a house is something that in the UK is particularly hard to make sense of. So, in this article all is going to be talked about that will help you make your decision. Often, prices can seem extremely similar with not much difference in the policies that come along with home insurance.

This article aims to remove the guesswork so you as a landlord know exactly what you’re looking for when you embark on your search.

Woman holding a home insurance application

What is home insurance?

Home insurance is a type of policy that covers the homeowner in the event of there being a large financial burden on the household such as a fire or gas leak.

This means the homeowner will be financially reimbursed for such an event and their property business or financial situation is not likely to take a massive hit.

Home insurance can be paid per year or on a monthly basis to a home insurance provider and is more or less expensive depending on what kind of damage you want to cover, how likely that damage is to occur as well as the value of the property. 

Often, insurance is seen as an additional payment you have to make when dealing with property alongside things like stamp duty and land tax, or land and building transaction tax but this isn’t always the case and there are interesting ways to reduce your premium.

A property with a large value and small risks involved with it may very well be able to get cheaper home insurance coverage than a property with a high risk associated with it for example.

This works in the same way as most other types of insurance and the mathematics behind how to calculate home insurance costs are constantly evaluated based on real data and surveys.

What does home insurance cover?

Home insurance covers many different emergencies and rare events and what you choose your home insurance to cover is often up to you. There are some aspects of home insurance that under certain laws have to be covered as a result of necessity.

But there are others that are up to the homeowners’ discretion such as damage to electronic goods for example.

Emergency flooding

Fortunately, for home insurance companies, homes that are located in a floodplain with a risk of flooding can be easily identified. This is because bodies of water like rivers, seas, lakes and reservoirs do not change location.

And the homes around these locations would likely have flooded in the past or it is easy to predict where those houses will flood.

Therefore, it is easy to add on a premium to properties that would like flood insurance coverage and it is a good idea for a landlord or homeowner to get this flood insurance coverage as a flood can cause massive amounts of damage.

A severe flood can completely destroy the value of a property and force it to be rebuilt as the structural integrity of the premises can become compromised.

Flooding insurance is therefore very important in this case.


Storms are the less predictable weather events. You can predict it based on the geographical location however a freak weather event with high winds may damage your property unpredictably. Especially if the integrity of your property is already compromised.


Fire is another disastrous event that can happen to your property. Usually, fires are noticed and are able to be controlled without them getting out of hand.

However, fires that start when no one is around or as people are sleeping as a result of faulty kitchen equipment are some of the most dangerous fires that result in home insurance claims.

A small fire from a kitchen appliance can spread from house to house and worsen by already flammable furniture within your property.

For tips on fire safety click here

Firefighters putting out a large fire


Theft will always be covered under home insurance. It is perhaps the biggest violation a homeowner can experience. Break-ins can be severe where a lot of electronic and valuable items have been stolen.

Unfortunately, due to the intrusive nature of a break-in, often even with home insurance, if sentimental items have been damaged or taken, the effects of a burglary can never be recovered from.

Water pipe damage

Water pipe damage is a common occurrence in the winter when there is the freezing of water that expands within pipes and can burst or split pipes that are full of water.

As you can imagine, pipes do not last forever, so sometimes you will have to have an evaluation as to whether your pipe damage is due to poor maintenance of the property over time or if it is actually an emergency.

This is because the general wear and tear of a property are not covered under home insurance.

What’s excluded from home insurance?

While you may be able to find all the home insurance coverage you need most of the time. There are unfortunately examples that aren’t typically covered by home insurance companies.

Unless you specifically asked to be covered by the below circumstances, most of the time this is a general list that home insurance companies will not cover.

The depreciation of the property over time

Sometimes, due to symptoms of weather like freezing and thawing and the subsidence of soil over time, part of the properties can break, crack or fall off.

Things always get old and unfortunately as this process is inevitable eventually, home insurance companies don’t cover these long-term damages. Even if the property becomes inhabitable and impacts your rental income. It is crucial you calculate rental yields based on profits before you make an offer on a property.

Sometimes, a property with a small bit of damage may impact the price a lot but if it is fixable so you can bring the property back up to liveable conditions. Property auctions are often great places to find opportunities like that.

Another way round this situation would be to have rent guarantee insurance if you know the property is likely to become inhabitable for a short period of time while you do repairs.

Damage is done on purpose to your property

If you have troublesome tenants or are careless in your home days and end up damaging your property. This isn’t covered under home insurance damage. No matter how severe.

For example, if you were to do some construction on your house yourself which you weren’t qualified for, damaging your property, this will not be able to be covered by home insurance policies.

Or, as a landlord it may be a common occurrence to visit your property for rent collection or for building repairs and notice the damage done on purpose by tenants.

Unfortunately, in events like this, you will have to pay for the cost of repair yourself.

Damage caused by insects or pets

Sadly, if you own a cute pet that damages your property without you knowing. This will fall under damage done on purpose to your property.

To home insurance companies, pets are seen as your responsibility to keep under control and away from chewing up home furniture or defecating on your hard-to-clean areas of the home. Read here for an article on how to properly accommodate pets in your home.

To make sure this doesn’t happen, train your pets as well as you can and make sure your house has been designed to accommodate your pet without causing damage. For example, mounting your TVs securely or covering delicate pieces of furniture.

Couple holding two dogs needs pet insurance

How much is home insurance on average in the UK?

Interestingly, people who live in flats pay the most for their home insurance. This is largely due to the increased risk of fire in flats as fires can easily spread from unit to unit.

Semi-detached houses pay the least. This is due to them having a smaller number of bedrooms than detached houses on average but a reduced fire risk because they have no wall on one side of the house.

These builds are also generally new builds, so the property has had less time to depreciate in structure and has been built with better safety procedures.

Overall, this means home insurance is in the region of £105 to £140 per year on average.

If this is unaffordable, considering alternative ways you can invest your money to property or sticking to your pension rather than property may be a good idea.

How much is home insurance a month in the UK?

When breaking down home insurance costs per month, it is often quite inexpensive. Per month, most people pay just around £10 per month which can be as little as £0.30p per day.

This is perfect if you are trying to invest in property or buy a property with no money as home insurance shouldn’t really give you any costs you cannot handle. 

Even if you are on a help to buy scheme on a property, the costs are generally affordable.

Difference between home insurance and building insurance

The key difference between building insurance and home insurance is that building insurance focuses on the fixed aspects of your home. This relates to things like walls, doors and windows.

Home insurance can cover you in case there is damage to other things such as furniture or even structural damage over time.

Is it worth getting home insurance?

Obviously, setting up home insurance can cost you financially if there is not a need for the use of your insurance in the long term.

But on the other hand, if you don’t have home insurance and you get unlucky in a property which results in a burglary or a fire, for example, the financial burden to recover from such an event can bankrupt you or set you back financially for years.

Therefore, if you know you don’t have the spare cash lying around to recover in the event of an unfortunate event, then buying home insurance is probably a good idea alongside the purchase of your home.

However, in the same way, buying home insurance costs a certain amount of money. The difference is this money doesn’t have to be paid upfront and can be paid in monthly instalments.

So in summary, whether you choose to take out home insurance is entirely up to you and the level of risk you are able to take on. But in general, most people aren’t in the position financially to take on massive amounts of risk so buying home insurance would be your best bet.

What happens if I don’t have home insurance in the UK?

It is not essential for you to have home insurance by law in the UK all of the time. However, if you are a certain type of Landlord, tenant or leaseholder sometimes you will need specific types of insurance.

Person writing about home insurance on a laptop

These circumstances are listed below:

1. You are a landlord taking out a mortgage

As a landlord taking out your own mortgage, you will have to value your property and then sign up for building insurance so you can get your mortgage approved by your lender. 

This is due to mortgage brokers wanting to protect their investment in case there was a fire or environmental damage to the property. Until you have finished paying off your mortgage, legally, your property legally belongs to the bank.

Depending on your lender, if you are buying a second home, as a landlord you can combine the insurance of both your properties.

2. You have a leasehold agreement

It is common for tenants paying rent in a leasehold agreement to have to pay for home insurance while they are in agreement. This is common where freeholders buy land to build on it and rent out their property.

In a leasehold agreement, the land owner or freeholder hands over the ownership of the property to the leaseholder for a set period of time.

During this time it will be the responsibility of the leaseholder to take responsibility for the poverty. This includes paying for home insurance.

This agreement works because the freeholder owns the land the property is built on but the leaseholder owns the property built on the land.

3. Sometimes if you are a tenant

Occasionally you may be paying for home insurance as a tenant even if you don’t know it. This is because the landlord will include the price of the insurance within the rent.

However, in other cases, the landlord will ask that you arrange home insurance yourself as a tenant even if you aren’t directly paying for it with your rent. This will be included in an additional cost as part of your costs of living in the property.

Do I need home insurance if I have a mortgage?

As discussed, yes you do need home insurance if you have a mortgage. This is due to the lender being unable to lend you a mortgage for your home in the first place if you aren’t willing to pay for home insurance.

Man and woman holding a small house

Is home insurance paid with the mortgage?

Sometimes, a mortgage provider will include your home insurance payments alongside the mortgage. This makes things simple as most lenders will not give you a mortgage if you don’t have home insurance anyway.

However, you do not have to take this option and paying for home insurance separately is also an option.

It is worth comparing prices when it comes to this as some mortgage providers will sneak in a premium here for the convenience of only having to make one simple home mortgage payment per month.

This is opposed to paying two payments. One to pay the mortgage and one to pay off home insurance.

Why do people pay for home insurance?

The biggest motivator for buying insurance in general if it is not an obligation is perhaps fear.

For many people, a property is a huge investment and in the UK, throughout the population’s entire lifetimes, just 63% of people actually own their home outright. Click here for this for more on this topic.

As a result, when you eventually do get to own a home, most people will want to protect it with home insurance so that if a disaster happens, they are able to recover most of their financial investment.

What is the most important part of homeowner insurance?

When looking at the significance of homeowners insurance, the most popular claim is water damage.

However, most people try to claim accidental damage under their home insurance. In rare cases where you can prove the damage wasn’t directly your fault or due to previous owners or poor construction, claims like this can be approved.

However, accidental damage is not covered by most home insurance policies and this can also include damage your pets do to your home as they are considered your responsibility.

So overall, as long as your home insurance covers things like water damage from pipe damage or a weather event like flooding or a storm, these are the most sought-after claims and are also likely to get approved. Making water damage the most important.

Even if you are buying a new build property where everything is assumed to be in working order or taking over a property with a tenant in situ who says everything has always been fine with the property. Things go wrong when you least expect it.

What are the different types of home insurance?

The most common type of insurance is usually related to building insurance. Covering the physical structure of the property. 

In addition, there is also content insurance that is less important but some people who are risk-averse tend to take on it. This refers to the furniture and moveable items within the house.

Depending on your living situation, you may choose to take on more or less insurance. For example, key protection is a type of contents insurance that varies widely among different people and may make sense for one person but not make sense for the other.

If you are a responsible adult, chances are you don’t think key insurance is worth paying for. In contrast, a family with children who own keys to the house and are more likely to be forgetful may think key protection insurance is well worth it.

Building insurance

Building insurance, referring to the cover of the physical structure of premises, can take many forms depending on who lives in the house and what type of property it is.

Tenants insurance

This refers to protecting you as a tenant in case your landlord doesn’t take the necessary safety precautions when setting up a buy to let for you as a renter.

Student insurance

Student insurance sometimes leans more towards contents insurance as it covers things like laptops, student equipment and phones. However, it sometimes also covers rent in case a landlord is to neglect a property and you are forced to move out in an emergency.

Holiday home insurance

This type of insurance is often quite expensive because holiday homes are left unoccupied for large amounts of time. This is a big factor in increasing the rates of burglary and theft.

However, for those who can afford a holiday home, chances are you can also afford the insurance that comes along with it so your holiday home is financially covered when you aren’t there.

High-value home insurance

Often, homes that are particularly above the average home price can be sold with a different type of insurance that covers additional things most homes do not have.

This can include swimming pools, gyms and libraries. The more things you have in your home the more that can go wrong. This is why high-value home insurance often falls into a separate category.

clean, white living room with home insurance

When should you get building insurance when buying a house?

When should you get building insurance when buying a house? You will most likely need building insurance when buying a house as soon as you sign up for your mortgage as most lenders will not give you a mortgage without some form of building insurance being in place.

Contents insurance

Typically, contents insurance covers most of the things within your home. You will have to check your policy specifically to see if you can be covered by damage to any of these things specifically but they can be:

  • Furniture damage cover
  • Key protection cover
  • Electrical item cover
  • Expensive jewellery protection
  • Kitchen cover
  • Landlord boiler cover (which covers you from things like boiler kettling)


To conclude, when deciding on the right home insurance there is a range of things to consider. From differentiating between building insurance and contents insurance to whether it is even necessary in the first place. Also, whether you will need to take on any insurance that landlords need too and if you need to conduct a rebuild cost assessment as a result.

It is important to do some in-depth research, consider your risks depending on whether you are a landlord or tenant and make an informed decision from there.

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Donnell Bailey

Property expert

Donnell is a property expert focusing on the property market, he looks at a combination of legislation, information from property managers, letting agents and market trends to produce information to help landlords.