Insurance News

The difference between building and contents insurance can often be overlooked

What insurance do you need to protect your home?

November 2020


The difference between building and contents insurance can often be overlooked and underestimated by policyholders, and yet you'd be surprised at the problems confusing the two policy types can cause.

Building insurance covers the physical structure of the property, which includes the walls, roof and flooring.

Whereas contents insurance covers the items inside, such as: furniture, freestanding appliances, and personal belongings like jewellery.

Should anything happen and you’re unprotected, it can have some serious consequences financially.  

What do these policies protect you from?

Building insurance covers any financial cost of repairing any damage or theft related to the structure of your property. The cause of damage is important, as a typical policy covers situations that are out of your control, which can include flooding, fires, vandalism or other weather-related issues.  

Building insurance will cover everything that could be considered as part of your property; doors and windows included.

It can also cover bathroom fixtures and fitted kitchen appliances. Outer buildings, such as garages and sheds, can be protected with this policy but there are exceptions. 

If and when you need to submit a claim, the insurance value would be calculated based on the rebuild value not the market value of the property, so you will need to bear that in mind.

This is an important distinction, as you will not be covered for the market value of the property prior to the damage.  

Your contents insurance policy covers your belongings against theft, fire or flooding. Of course, depending on your policy, there are some things that wouldn’t be covered.

General wear and tear, virus damage (to computers) or anything related to your buildings structure won’t usually be covered.  

Your policy may also have a limit to valuables, such as a limit of £1,500 for a single item (please check with your insurance policy).

If you do have expensive artwork or jewellery, you may want to buy extra cover for those items.

Most policies offer new for old cover, which means that you will get the full replacement cost of the item that is lost or damaged.

Some policies will – however – only offer you the amount that the item is worth at that time. You should always ensure you check what your policy is offering to replace before you take it out.  

As ever, for reliable and informative insurance guidance, please talk to us today.