Everything you need to know about home insurance

Jennifer NewtonJennifer Newton

Advice from consumer expert Jennifer Newton and a panel of industry professionals on home insurance and what kind of insurance you need for your project.

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If you’re taking on a renovation project

‘Whatever type of refurbishment you are doing, always check that the tradespeople are insured by asking to see a certificate of public liability insurance,’ advises Stuart Curson. Also check for professional indemnity, product liability and employee liability insurance. ‘It’s the builder’s responsibility to make sure the site is safe to work in. However, you should make the builder aware of any hazards, such as if you are having work done to the roof at the same time. Before the project starts you must phone your insurer, who will be able to advise on what you will be covered for, and will tell you if the excess or policy is increased during the work.’

Charlotte Bennett adds: ‘Most insurers would not charge an extra premium for basic renovations, but more extensive changes can increase the possibility of a claim, so it’s advisable to tell your insurer.’

If you’re moving out while work is being done to your home

‘Many mainstream insurers may not cover you if you are not living in your property while it is being renovated,’ explains Charlotte Bennett. ‘You should tell your insurer if you are carrying out any structural alterations to your property in case they are unable to continue cover. If cover is possible, they may be able to arrange a separate policy for contents only, for when you are living elsewhere.’

Stuart Curson adds: ‘Keep a snag list, to be completed before paying the builders’ final bill, as faulty workmanship is not covered on most insurance policies.’

If you’re buying a new property

Charlotte Bennett says: ‘When you exchange contracts, you make a legal commitment to buy. At this point you pay a deposit to the solicitor, and if you do not proceed with completion, the seller is entitled to the deposit. It is typical for the buyer to arrange buildings insurance from the date of the exchange of contracts.’

In addition, Gareth Kloet says: ‘If your property is mortgaged then your lender will require you to have buildings insurance in place. This cover is likely to need to run from the date of exchange of contracts up to the full term of the mortgage.’

What to consider if you’re buying a period property

‘For a listed or period home, you will usually need insurance from a specialist broker,’ explains Tracey Warren. ‘Online comparison insurers often don’t ask the right questions, for example the materials the property is constructed from or whether it is listed. Assumptions may be made that could leave you uninsured.’

Rachel Pyne agrees, adding: ‘You need to cover the building’s reinstatement value rather than its market value. For example, if it burned down, how much would it cost to rebuild and restore special roof tiles or historic features such as fireplaces? It takes expert knowledge to determine the figure. The cost will vary for each project, but as an example, it would be around £750 to provide £200,000 of cover for 18 months.’

You’re also responsible for any work done by previous owners and LPOC offers protection for this.

What your insurance should include

Buildings insurance is needed in case your property burns down or is flooded, and if you have a mortgage your lender will want to check that you have it. However, you should also consider contents insurance, as it can be cheaper to take out both with the same insurer. Contents insurance includes everyday items such as clothes, and items you use away from your home, such as mobile phones, laptops, handbags and bikes. Accidental damage cover can be useful if you’re prone to DIY mishaps.

Money saving tips

Gareth Kloet offers this advice:

  • Shop around on comparison sites or by calling various companies, as different insurers might be better for your area. For example, if a postcode has a history of past claims with one insurer, you’ll receive a more expensive quote than from another insurer that has had a good experience of that area.
  • Paying a higher excess on claims will get you a discount.
  • Don’t over-insure. Insure for the cost of your home’s rebuild, which is usually much less than what you paid to buy it.
  • Pay up front as it’s usually cheaper than monthly instalments.
  • Fireproof your home by fitting smoke alarms and a fire extinguisher.
  • Install a burglar alarm or security system – preferably one approved by NACOSS (part of the National Security Inspectorate) to reduce contents insurance.
  • Fit secure locks to accessible windows and five-lever mortise deadlocks (British Standard BS3621) to all external doors.
  • Make fewer claims – more claims will mean higher insurance premiums.

Essential advice for new-build homes

‘The benefit of a new property is that most come with a 10-year guarantee from the construction company,’ says Stuart Curson, ‘but watch out for properties on flood plains or near rivers as buildings insurance can be considerably higher in these areas.’

If you’re buying a plot to self-build, however, Rachel Pyne advises: ‘You will need specialist insurance and should arrange your policy to start as soon as you buy your plot of land or renovation property – at this point you are liable for injuries to members of public on your site. Even if your main contractor has its own site insurance, you will need public liability cover in advance of them starting work and when they are not on site. Buildstore specialises in this type of cover and renovation insurance you may not get on the high street.’