House insurance is a great way to ensure your home is fully protected if the worst was to happen. Having a comprehensive insurance policy in place guarantees that you aren’t left on your own in the case of a burglary or weather damage.
However, it’s important to be aware that home insurance and building insurance don’t always cover the same things – they are slightly different. Before deciding which type of house insurance policy to take out, you need to understand the difference between home and building insurance.
Thankfully, this building insurance vs home insurance guide outlines the difference clearly. We’ll answer all your house insurance questions. Is building insurance the same as home insurance? What is building insurance? What is contents insurance? What are other types of house insurance? Which policy should you choose?
There’s a lot to discuss, so let’s get on with it…
When choosing which insurance policy to get to cover your property, it can be tricky to know what covers what. However, it is paramount that you properly understand the difference between each type of home cover. So, what is the difference between home insurance and building insurance?
When we compare building insurance vs home insurance, there are some key differences you need to be aware of. Generally, home insurance is used as an umbrella term that covers all types of house insurance, including both building insurance and contents insurance. As a homeowner, it is essential to break home insurance down into separate policies to assess what level of cover you need.
Some house insurance providers offer policies that combine both buildings insurance and contents insurance. These are often a great option as they neatly package both types of cover under one policy.
However, if you’re a landlord or are a tenant renting your home, a comprehensive home insurance policy that includes building and contents insurance might not be necessary.
Landlords should have building insurance to cover the property itself, but content insurance might fall under the responsibility of the tenant. Likewise, for tenants, while contents insurance might be needed to cover their belongings, building insurance will likely be provided by the landlord.
So, when comparing building insurance vs home insurance, remember to account for your individual circumstances. Ask yourself, do you really need both building and contents insurance?
Right, now we know the difference between home and building insurance, but what actually is building insurance and what does it cover?
Buildings insurance covers the structure of your home along with any permanent fixtures and fittings, like your roof, your kitchen units, and your bathroom suite.
Although you don’t have to have buildings insurance, mortgage lenders will usually insist that you do as this presents less risk to them.
If you are going to take out buildings insurance, you can opt for a single building insurance policy or take it out as a combined buildings and contents insurance policy. It’s a good way to take it out as soon as you exchange contracts so that you’re covered if something happens to the building before you move in.
When comparing building insurance vs home insurance, you’ll need to consider whether or not you need contents insurance. If you do need contents insurance to cover the cost of your belongings, you’ll be better off opting for a comprehensive home insurance policy, rather than a single building insurance policy.
Contents insurance pays out if damage occurs to items within your home, such as furniture, personal belongings, electrical equipment and more. Most contents insurance policies will cover any damage caused by fire, theft, and flooding.
While you don’t have to have contents insurance, it does give you the peace of mind knowing that if something happened to your belongings, the insurance company would be able to help pay for replacements – you’d probably be surprised at how much it would cost to replace everything in your house.
As discussed above, there are important differences between home and building insurance – the main one being that home insurance is a broader term that covers both building and contents insurance.
However, while home insurance is normally broken down into buildings and contents cover, there are some other insurance policies which fall into this category too. For example, there are specific home insurance policies for listed buildings, non-standard constructions, landlords, students, holiday homes and more.
A standard building insurance policy won’t cut it for landlords. This is because someone else is living in the property and they have a responsibility to maintain the building being rented out.
Landlord insurance can also cover you for things like loss of rent, alternative accommodation, and public liability.
If you’re renting your home, you don’t need to insure the building – just all your stuff that’s in it. So, you might as well save yourself the time looking through home insurance policies, and look for tenant’s insurance instead.
This type of insurance should cover your belongings, and it might cover the items provided by your landlord, such as carpets and curtains.
Similarly, as a student renting accommodation, you won’t need full home insurance cover – you’ll just need to insure your own possessions. While some contents insurance policies do insure your belongings when temporarily living away from the family home, not all do.
Getting your own student’s insurance will mean that you can be certain all your things are covered. This type of insurance is especially tailored for the sort of things you’re likely to have at university, such as laptops, phones and bikes.
If you live in a listed building there might be certain restrictions that can make repairing them slightly more expensive. As a result, there are specific types of home insurance coverage for listed buildings.
A listed building insurance policy should take into account the fact that the property holds a certain level of prestige and that it might cost more to rectify any damage.
Therefore, opting for listed building insurance rather than normal home insurance or building insurance will ensure you have the right level of cover.
Also known as high-net-worth home insurance, high-value home insurance cover tends to be split into buildings and contents cover – much like standard policies.
As a rule of thumb, high-value buildings are those that would cost more than £500,000 to rebuild. This figure will likely vary depending on the insurer, though.
To work out whether your property is classed as ‘high value’, you will need to consider the building itself and its contents. High-value contents are things like works of fine art, certain antiques and expensive jewellery.
Standard contents policies usually have a single-item value limit. So, if a valuable painting or an expensive necklace is stolen, you might not be able to claim for the full amount through a normal home insurance policy. A high-value home insurance policy makes room for this extra value to give you some added protection.
Non-standard construction refers to unique or interesting properties – those that are out of the ordinary in some way or another. Maybe you’ve built it yourself from scratch, or you’ve used timber frames and thatched roof to give it a rustic feel.
However you’ve chosen to make your home your own, many of the big-name insurers will shy away from covering this kind of house because there is added risk involved. Timber frame or thatched roof? Greater risk of catching fire. A self-built house? There may be greater risk of it collapsing.
Luckily, some more specialist insurers offer non-standard home insurance policies that will cover the repair costs of such homes.
If you have a second home that you treat as a ‘holiday home’, it’s likely that it won’t be covered in the same way as your main house. This is because holiday homes are often left empty for long periods of time – so, you might need a separate holiday home insurance policy.
Usually, insurers consider 30 days to be the most you can be away from home and still be covered by your home insurance policy. Empty homes means added risk of burglary.
Getting a second home insurance policy might not be ideal, but it’s important to be fully open about the fact it’s not your main house. Otherwise, any future claims you make might be void.
As mentioned, an empty property means higher risk of someone breaking in and taking something. So, if you own an empty property, you’ll need to purchase a separate unoccupied home insurance policy to make sure you’re covered.
Generally, home insurers don’t like properties to be empty for more than 30 days at a time. However, unoccupied home insurance will cover an empty property for much longer than standard home insurance, and will cover you for things like vandalism, fire damage, and flood damage.
So, with all those different types of home insurance to think about, what type of home insurance is best for you?
It’s tricky knowing what type of home insurance policy is right for your property and your belongings. There are hundreds of policies on the market, covering the most basic to the most extravagant homes.
We’ve compared home insurance vs building insurance and explained the difference between the two. Now, it’s up to you to determine whether you need both aspects – building and contents – or just one.
If you’re a homeowner you’ll most likely feel that both are important to you and therefore, in many instances, a combination of building insurance and contents insurance will work best. If you rent, check who has the responsibility of insuring the building – this will usually be the landlord and should apply as part of their landlord insurance policy.
First, your priority should be ensuring you have enough cover. The last thing you want is to pay for a policy that you can’t claim on. However, you don’t want to be over-insured.
The best thing to do if you’re unsure what type of home insurance cover you need, is to give your insurer or potential insurer a call. They should be able to tell you whether a new policy gives you the right kind of protection or not.
We get it – deciding on a home insurance policy is confusing at the best of times, nevermind when you don’t understand the difference between home and buildings insurance.
Hopefully, this guide has shed some light on building insurance vs home insurance and which one is best suited to you and your home.
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