Home insurance in the UK: buildings vs contents, what a renter needs and how not to lose your payout

In Britain, “home insurance” is two different products, and mixing them up costs money. Buildings insurance covers the walls and structure — the owner’s concern, and compulsory with a mortgage. Contents insurance covers what is inside — and it is the only one of the two that matters for a tenant: a landlord’s policy never covers a tenant’s belongings.

Based on Citizens Advice guidance: what each policy covers, which items are switched off by default, how not to under-insure, and what to do when an insurer refuses to pay.

What does contents insurance cover?

Your own possessions and those of close family living with you: against fire, flood, storm and theft. Belongings of temporary guests are usually not covered. The base cover is “catastrophe” risks; accidental damage (dropped, spilled — relevant with children and pets) almost always costs extra, as do items you carry outside the home and especially valuable single items. Watch the single-item limit: expensive tech or jewellery may not fit under it. Most policies carry an excess — the first £50–100 of a claim is yours.

What is new for old — and why does it matter?

“New for old” policies pay the full cost of replacing an item with a new one. Policies without it pay only what the old item was worth — for a five-year-old laptop you get the price of a five-year-old laptop. Check before you buy, not when you claim.

Does a tenant need insurance?

By law — no. In practice — yes, for two reasons. Nobody but you covers your things: the landlord’s buildings policy protects the building, not your laptop. And check your tenancy agreement: you may be liable for the landlord’s furniture, appliances and fixtures and fittings — and that liability is covered precisely by your contents policy.

What does buildings insurance cover?

The cost of repairing and rebuilding the structure: walls, roof, pipes, cables and drains, plus garages, sheds and fences. Standard risks: fire and explosion, storm and flood, earthquake, theft and vandalism, frozen and burst pipes, fallen trees and lampposts, subsidence, vehicle or aircraft collision. A good policy also includes demolition, site clearance and architects’ fees — rebuilding is more than bricks.

Who must have buildings insurance?

Mortgage borrowers: it is a condition of the loan, for at least the outstanding balance. You may choose the insurer; the lender can reject a particular one but cannot force its own policy on you (unless insurance is part of the mortgage package). When buying, cover must run from exchange of contracts, not from moving day. Leaseholders are usually covered by the freeholder — who recharges it through the service charge; check the cover actually exists. A tenant does not need buildings insurance at all.

How much should you insure a home for?

For the rebuild cost — not the purchase price and not the market value; rebuild cost is usually noticeably lower. The BCIS calculator works it out. Some policies set the sum by the number of bedrooms (bedroom rated) — for an unusual property that may not match reality. Under-insure and payouts get cut proportionally; over-insure and you pay for air.

How do you avoid a refused payout?

Three rules. Answer the insurer’s questions accurately — incomplete answers surface at claim time and turn into refusals. Read the exclusions: freezers, phones, items away from home, single expensive items. Review the sum regularly: after a renovation or big purchases the old policy is too small. And count everything, including carpets, curtains and the shed — almost everyone underestimates.

The insurer said no — what now?

First a formal complaint to the company itself, then — free of charge — the Financial Ombudsman Service. How that route works and why it often succeeds, we covered separately: how to complain and win. For money disputes outside insurance there is the small claims track.

Where do you start, in short?

Tenant: price up all your possessions honestly — clothes, kitchenware, the lot — get several contents quotes with new for old, and check the clause on liability for the landlord’s items. Owner: make sure the buildings policy covers the full rebuild cost, not the market value. Mortgage borrower: do not accept the bank’s policy automatically — compare.