Buildings insurance covers the physical structure of your home, including the walls, roof, windows, and fixtures, against risks such as fire, flood, and storm damage. Contents insurance covers the belongings inside your home, from furniture and electronics to personal possessions. Most mortgage lenders require buildings insurance to be in place from the point of exchange, so it’s one of the things worth arranging early rather than leaving until the last minute.
We’ll help you understand what your lender actually requires, what level of cover makes sense for your property, and where combined policies might save you money compared with buying buildings and contents insurance separately.
Getting the sums insured right matters more than most people realise. Rebuild Cost Assessment data suggests a large majority of UK buildings are underinsured, with affected properties typically covered for only around two-thirds of what it would actually cost to rebuild them. If a claim is made on an underinsured property, most insurers apply what’s known as the average clause, reducing the payout by roughly the same proportion that the property is underinsured.
Contents cover is often overlooked entirely. Research by GoCompare found that around 9.3 million UK households have no contents insurance at all, leaving an estimated £276 billion worth of belongings unprotected. According to the Association of British Insurers, the average combined buildings and contents insurance policy costs around £375 per year, making it a modest price compared with the financial impact of losing everything in your home.
The most common reason for a claim in 2024 was musculoskeletal conditions, such as back and joint problems, which made up 34% of all income protection claims. Mental health conditions were also among the leading causes, which is worth knowing if you’re weighing up whether this type of cover is relevant to you.
| Feature | Buildings Insurance | Contents Insurance |
|---|---|---|
| What it covers | The structure, walls, roof,fixed fittings | Furniture, electronics, personal belongings |
| Mortgage requirement | Usually required by lenders from exchange | Not usually required, but often recommended |
| Typical claims | Storm damage, fire,escape of water,subsidence | Theft, accidental damage, fire |
| Cover basis | Rebuild cost, not market value | Total value of contents, or new for old |
If you’re buying a home, most mortgage lenders require buildings insurance to be arranged from the point of exchange of contracts, as that’s when you become legally responsible for the property, even though you haven’t yet completed the purchase. Leaving this until completion day is a common and avoidable mistake. If you’re remortgaging, it’s also a sensible time to review your existing cover rather than simply letting it renew automatically.
Josh and Lucy were three weeks away from exchanging contracts on their first home and hadn’t considered buildings insurance until their solicitor raised it. We arranged suitable cover in plenty of time and based it on the rebuild cost confirmed in their survey rather than the purchase price, helping them avoid both underinsurance and paying for cover they didn’t need.
Helen had been with the same insurer for eight years without reviewing her cover, and her contents insurance still reflected the value of her belongings when she first bought the property. When she remortgaged with us, we identified this during the mortgage review and helped her switch to a policy that better reflected the current value of her possessions, while also reducing her overall premium.
There’s no general legal requirement to have buildings insurance, but almost all mortgage lenders require suitable cover to be in place from the exchange of contracts. Without it, you could be in breach of your mortgage terms.
It helps, but it isn’t always essential. Some lenders on our panel specialise in supporting businesses with a less-than-perfect credit history, particularly where the underlying trading performance is strong. It’s always worth having the conversation before assuming you won’t qualify.
A business loan provides a fixed lump sum that is repaid over an agreed term, while invoice finance releases cash tied up in unpaid customer invoices as they are raised. Depending on their funding needs, many businesses choose to use both products together.
Not usually. Accidental damage cover is often an optional extra on both buildings and contents insurance policies. It’s worth considering, particularly for contents cover, if you have children, pets, or simply want broader peace of mind.
