Uk Home Insurance: Which Policy?

There are two main types of home insurance: buildings insurance and contents insurance. Buildings insurance covers the cost of repairing damage to the structure of your property, while contents insurance covers the cost of replacing items in your home if they are destroyed, damaged or stolen. Most people who own their home need both types of insurance, and it's often cheaper to buy them together. However, renters and some leaseholders only need contents insurance, as their landlord should provide buildings insurance.

When choosing a home insurance provider, it's important to consider the breadth of cover offered by a policy, the cost, and the claims experience of customers with that provider.

Buildings insurance

The cost of buildings insurance is calculated according to how much your house would cost to rebuild and your postcode, among other factors. The rebuild value of your building is the cost of rebuilding the property from scratch, not the market value (what it would cost to buy the property). You can use the Association of British Insurers' calculator to get an idea of the rebuild value of your building.

You can buy buildings insurance separately or together with contents insurance from the same provider. Combined insurance is often cheaper than separate policies, but you should always compare quotes to make sure it's the right option for you.

Contents insurance

When taking out contents insurance, you will need to provide details such as your address, property type, the value of your possessions, and rebuild costs. You will also need to decide on the level of cover you need and any additional cover you may require. For example, accidental damage cover will need to be taken out as extra. Other types of additional cover include legal cover, home emergency cover, away-from-home cover, and jewellery cover.

When deciding on a contents insurance provider, it is important to look at factors such as the breadth of cover offered by the policy and the claims experience of customers with that provider. It is also worth noting that some providers will offer unlimited contents insurance, while others will have limits on the amount that can be claimed for individual items.

Home insurance providers

When looking for home insurance providers, it's important to consider your needs and household profile, including the location of your home, your budget, and whether you want buildings insurance, contents insurance, or a combined policy. Comparing quotes from different providers and shopping around can help you find the best deal suited to your requirements. Here is a list of some of the UK's biggest home insurance providers:

Tesco Bank

Tesco Bank has received praise for its quick, efficient, and understanding responses to claims, as well as the overall quality of its customer service team. It offers unlimited buildings cover as standard and includes valuable items not specified on your schedule in your contents policy. However, it only offers one level of cover.

Axa

Axa offers three cover tiers: Axa Home Insurance, Axa Plus, and Axa Premier. It provides a three-year guarantee for building repairs from an approved tradesperson and has no compulsory excess for replacement locks and keys. On the downside, it does not offer a no claims discount and does not cover credit cards. Some customers have also mentioned long waits to speak to customer support.

Direct Line

Direct Line offers three levels of cover: Home Insurance, Home Insurance Plus, and Select Premier. It provides equal cover limits for possessions stored in sheds or garages and covers expenses for damage to belongings in outbuildings. While Direct Line's customer service has received favourable reviews, its online claim process has been criticised.

LV

LV offers three tiers of cover: LV Essentials, Home, and Home Plus. It provides a good level of customer support and equal cover limits for shed or garage-stored possessions. It also covers damage caused by the gradual buildup of groundwater. However, it lacks a no claims discount, and its Home Emergency cover does not include underfloor heating.

Saga

Saga offers two tiers of cover: Saga Select and Saga Plus. It provides up to £100,000 for alternative accommodation and lost rent included with Select buildings cover. However, its policies are only available to those aged 50 and above.

Aviva

Aviva provides two tiers of cover: Aviva Online and Aviva Premium. It offers a good range of optional extras and unlimited cover, excluding properties with more than five bedrooms. Customer reviews are mixed, with some praising Aviva's clear communication and efficient claims handling, while others have criticised claims processing and policy pricing issues.

Rias

Rias offers tailored coverage for households with older or medically challenged occupants, including protection for loaned medical equipment and accidental damage to wheelchairs and stairlifts. It also offers £1,000 towards counselling fees. However, it only offers one level of cover, and some customers have complained about difficulties when making a claim.

Churchill

Churchill offers two levels of cover: Home Insurance and Home Plus. It provides customisable policies with a range of optional extras and unlimited buildings insurance with Home Plus. However, it has received a low rating of just two stars from Fairer Finance for its standard Combined Home Insurance. Customers have also complained about the lengthy time it takes to deal with claims.

Esure

Esure offers unlimited buildings and contents cover and allows claims of up to £2,500 for visitor or guest belongings and up to £10,000 for business equipment. However, it only offers one level of cover, and claims for theft from outbuildings and garages are limited to £2,000. Customers have also mentioned the difficulty of reaching customer support over the phone.

Hastings Direct

Hastings Direct offers three levels of cover: Essentials, Direct, and Premier. Its Direct buildings insurance includes £100,000 in alternative accommodation and lost rent cover, while Direct contents policies provide a generous tenant's liability limit of £15,000. On the downside, the alternative accommodation benefit with Direct contents cover is only £10,000, and Direct content policies offer only £500 for theft of keys. While Hastings Direct is praised for its competitive new customer quotes and home emergency cover, multiple customers have had issues with cancelling policies.

Home insurance costs

The cost of home insurance in the UK is on the rise, with the average quoted price for home insurance surging by 40.6% over the twelve months leading up to January 2024. The average cost of a combined home insurance policy now stands at £375 per year, with standalone buildings insurance at £298 and contents insurance at £132. However, there are many factors that can influence the cost of your home insurance.

Factors Affecting Home Insurance Costs

The type of cover you want, the property's type, size, and construction, the cost of rebuilding your property or replacing your belongings, the history of damage to the property, how the property is used, and security measures in place can all impact the cost of your home insurance.

Ways to Save on Home Insurance

• Compare prices on different websites and insurers that aren't listed on comparison sites.
• Haggle with your current provider by using cheap home insurance deals elsewhere as leverage.
• Improve your home security to be considered a low-risk customer.
• Only get the insurance you need. While contents insurance is recommended for everyone, buildings insurance is only necessary if you're responsible for the condition of the property.
• Use a valuation calculator to avoid overpaying for your home insurance by incorrectly calculating the value of your building and contents.
• Set the correct excess. You can get cheaper home insurance by increasing your excess, but make sure it's still affordable if you need to make a claim.
• Pay annually for your home insurance if you can afford it, as paying monthly usually involves high interest.

Home Insurance in the US

In the US, the average cost of homeowners insurance is $2,230 per year for $300,000 in dwelling coverage, but rates vary by state. The cheapest states for home insurance include Vermont, West Virginia, Delaware, New Hampshire, and Oregon, while the most expensive states include Florida, Nebraska, Oklahoma, Louisiana, and Kansas. The cost of home insurance is influenced by factors such as the age of the home, square footage, cost of building materials, and location. Natural disasters common to specific areas can also impact premiums.

Home insurance policies

Most people who own their home need both types of insurance, and it's often easier and cheaper to buy them together. However, renters and some people in leasehold properties only need contents insurance, as their landlord provides buildings insurance.

When choosing a home insurance policy, it's important to consider the breadth of cover offered by the policy, the cost, and the claims experience of customers with that provider. You should also check whether the policy covers the types of damage likely in your area, such as flooding or wildfires, as you may need to buy additional coverage if they are omitted.

Other things to consider when choosing a home insurance policy include:

• The amount of coverage you need depends on the value of your home and personal belongings. Check the insurance would cover the cost of rebuilding your home and replacing your belongings, and remember to consider the value of any major renovations or additions to your home.
• The excess is the amount you must pay out of pocket before your insurance coverage kicks in. A policy with a higher excess will typically have a lower premium, but you’ll need to pay more if you make a claim.
• Premiums are the cost of the policy, usually billed monthly or annually. Check what factors may affect your premium, such as your home’s age, location, or your credit score, and if there’s anything you can do to lower it.
• Understand what is excluded under the policy. Generally, this includes damage due to a buildup of water, pet damage, neglect, or intentional loss.
• You might want to consider policy upgrades depending on your possessions and lifestyle. For instance, running a business from home or having high-value items like jewellery or artwork could require additional coverage.
• Understand the insurer’s claims process before you sign up. How easy is it to file a claim and how quickly do they typically process and pay claims?
• Look at the insurance company’s ratings and reviews on sites such as Trustpilot and Defaqto. Check how they handle claims and their customer service reputation.

Frequently asked questions