Home insurance, explained

Home insurance pays to repair or replace things when something goes wrong at home, such as a fire, flood, storm, burst pipe or burglary. It comes in two parts: buildings insurance for the structure of your home and contents insurance for your belongings. You can buy both on one policy, buy them separately, or buy only the part you need.

If you have a mortgage, your lender will normally require buildings insurance. Contents insurance is always optional. If you rent, the building is your landlord's responsibility, so contents cover is the only part that applies to you. Most claim problems come down to three things: the sum insured was too low, the home was left empty for too long, or the cause of the damage was not something the policy lists.

Buildings vs contents insurance

MoneyHelper's simple test for contents is that it covers whatever would fall out if you tipped your home upside down.

Leasehold flats

If you own a leasehold flat and someone else owns the freehold, buildings insurance is usually arranged by the freeholder and paid through your service charge. If you own the freehold jointly with others in the building, you share responsibility for arranging it. Either way, you can ask for a breakdown of what you are paying for your share. Contents insurance is always yours to arrange.

What home insurance usually covers and excludes

Most buildings policies cover fire, flood, storm damage, vandalism, subsidence and water damage from leaking pipes. Most contents policies cover theft, fire, flood and loss.

Common exclusions on buildings policies, according to MoneyHelper, include normal wear and tear, deliberate damage, leaking gutters, certain pests, frost damage (unless it causes a burst pipe) and storm damage to gates and fences. Contents policies typically exclude wear and tear, deliberate damage and damage to a computer caused by a virus.

Excesses

The excess is the part of each claim you pay yourself. MoneyHelper says it is usually between £50 and £250, and can be higher for subsidence or some water leak claims. Many policies have separate, higher excesses for escape of water or subsidence, so check every excess listed in your schedule, not just the headline one.

Accidental damage

Accidental damage means sudden, unintended damage, such as spilling paint on a carpet or putting a foot through a ceiling. Many policies include only very basic cover, often limited to things like glass, sanitaryware or a TV. Fuller accidental damage cover is usually an optional extra. Even then, damage caused by pets, by DIY or by building work may be excluded.

Single item limits

Many contents policies cap what they will pay for any one item, often at around £1,500. Anything worth more than that, such as an engagement ring, usually needs to be listed separately on the policy.

New for old vs indemnity

Most contents policies are "new for old": they pay to replace a damaged item with a new equivalent, though clothes often have a deduction for wear and tear. An indemnity policy only pays what the item was worth just before the loss. MoneyHelper's illustration: a sofa that costs £2,000 to replace might only be valued at £200 under indemnity cover.

Underinsurance and the average clause

Your sum insured is the most the insurer will pay. For buildings it should be enough to clear the site and rebuild your home completely. That figure is usually lower than the market value, because it excludes the land. The ABI has a free rebuild cost calculator, and your purchase survey may also give a rebuild figure.

If your sum insured is too low, you are underinsured. Some policies contain an average clause, which reduces any claim in line with the underinsurance. The Financial Ombudsman Service gives this illustration: if your sum insured is £300,000 but should have been £500,000, an insurer applying average would pay 60% of the claim. That applies even to a small claim, like a damaged ceiling.

The ombudsman takes a cautious approach here. It says it is unlikely to find it fair to apply average without a clearly worded term, and that in practice it rarely agrees to it. Where an insurer would still have offered cover, but at a higher price, the ombudsman often prefers a reduction based on the premium instead. Its illustration: if you paid £400 but should have paid £500, receiving 80% of the claim may be fair. If the insurer would have offered the same price anyway, it is likely to say the full claim should be paid.

The ombudsman has also criticised vague questions like "sum insured?" instead of "what would it cost to rebuild?", and pre-filled online forms that suggest you don't need to check the figure.

Empty homes and unoccupancy clauses

Most policies restrict cover once your home has been unoccupied for a set period, usually 30 or 60 days. After that, theft, attempted theft, malicious damage and escape of water are commonly excluded. MoneyHelper says you will usually need to tell your insurer if you are leaving your home empty for 30 days or more, and they may set conditions, such as turning off the water or draining the heating.

The Financial Ombudsman Service notes that policies rarely define "unoccupied". Where a term is unclear, it reads it in its natural, ordinary meaning and usually adopts the meaning most favourable to the customer. It has accepted that a home visited reasonably often can count as occupied even if nobody sleeps there every night. It also says that if the damage happened within the first 30 days of the home being empty, the claim should normally be met.

This matters if you are working away, in hospital, or dealing with the home of someone who has died. Tell the insurer early and keep a note of what they say.

Flood cover and Flood Re

Flood is normally a standard part of buildings insurance. Your belongings need contents insurance to be covered against flood. Flood cover typically pays for removing debris, drying out and repairing your home, replacing damaged belongings, professional fees and alternative accommodation while you can't live there.

If you live in a high-risk area, quotes can be very expensive or hard to find. Flood Re is a reinsurance scheme, run jointly by government and the insurance industry, that helps insurers offer more affordable flood cover. It replaced earlier arrangements in 2016 and is designed to end in 2039, after which insurers are expected to price flood risk directly. You don't apply to Flood Re yourself: it works through insurers.

Flood Re's main eligibility criteria include that the home:

• was built before 1 January 2009
• is in a domestic Council Tax band A to H (or equivalent)
• is used for private residential purposes, insured in the name of one or more individuals
• is a single home, or a building of two or three residential units
• is in England, Wales, Scotland or Northern Ireland (not the Isle of Man or Channel Islands)

Blocks of more than three homes, business-rated bed and breakfasts and housing association properties are not eligible. A tenant's contents can be covered even when the building itself isn't eligible.

In Scotland, you can check flood maps on SEPA's website. MoneyHelper notes that the Scottish Government doesn't allow insurers to use this flood risk information when setting premiums. If your home has a history of flooding, tell your insurer, even if they don't ask.

What changes the cost

Insurers set prices using factors such as where you live, the rebuild cost, the value of your contents, your claims history, your security (for example, locks and alarms), the excess you choose and whether you pay monthly or annually. Since January 2022, insurers must not charge you more at renewal than they would charge an equivalent new customer for home insurance.

How claims work and why they get refused

You report the claim, the insurer checks whether the cause is covered, and it works out what it will pay, minus your excess. Larger claims may involve a loss adjuster, who works for the insurer. You can appoint a loss assessor to act for you, but they charge a fee.

Common reasons home claims are refused or reduced:

• the damage was caused by wear and tear or gradual deterioration
• the sum insured was too low
• the home was unoccupied beyond the policy limit
• information given when buying the policy was wrong, such as previous flooding or subsidence
• the item exceeded the single item limit and wasn't listed

If your claim is turned down, see what to do when an insurance claim is rejected.

What to check in your policy

• Sum insured for buildings: is it a rebuild figure, and when was it last checked?
• Average or underinsurance clause: is there one, and how is it worded?
• Contents sum insured and the single item limit; are valuables listed?
• Excesses: standard, escape of water, subsidence and accidental damage
• Accidental damage: included, limited, or not covered?
• Unoccupancy clause: how many days, and which perils are restricted afterwards?
• New for old or indemnity basis for contents
• Alternative accommodation limit
• Flood: any flood exclusion or higher flood excess?
• Personal possessions cover for items taken out of the home

When to talk to a regulated adviser

An insurance broker regulated by the FCA can recommend cover and arrange it, which can help if your home is harder to insure, for example because it has flooded before or has a history of subsidence. If you are struggling to pay your premiums, contact your insurer before cancelling: insurers must support customers in financial difficulty.

Common questions

What is the difference between buildings and contents insurance?

Buildings insurance covers the structure of your home, such as walls, roof and floors, plus permanent fixtures like a fitted kitchen and bathroom. Contents insurance covers your belongings, which MoneyHelper describes as everything that would fall out if you tipped your home upside down, including fitted carpets. You can buy them together on one policy, separately, or just the one you need.

Do I need buildings insurance if I rent?

No. Buildings insurance is your landlord's responsibility. If you want cover for your own belongings, you would need contents insurance. If you own a leasehold flat, buildings cover is often arranged by the freeholder and paid through your service charge, so it is worth asking for a breakdown of what you are paying for your share.

What happens if my sum insured is too low?

If the sum insured is lower than it should be, your insurer may reduce a claim, even for partial damage. Some policies have an average clause that cuts the payout in proportion to the underinsurance. The Financial Ombudsman Service says it rarely agrees that applying average is fair, and often prefers a reduction based on the premium you paid compared with the premium you should have paid.

How long can I leave my home empty before my insurance is affected?

It depends on the policy, but most set a limit of 30 or 60 days. After that, cover for things like theft, malicious damage and escape of water is often restricted. MoneyHelper says you will usually need to tell your insurer if you are away for 30 days or more, and they may ask you to turn off the water or drain the heating.

Is flood damage covered by home insurance?

Flood is normally a standard part of buildings insurance, and contents insurance covers your belongings against flood. If you live in a high-risk area and struggle to find affordable cover, the Flood Re scheme may help, provided your home meets its criteria, including being built before 1 January 2009.

Is accidental damage included as standard?

Usually only in a limited form. Many policies include basic accidental damage cover for specific items such as glass or a TV, with fuller accidental damage cover sold as an optional extra. Damage caused by pets or by building work may still be excluded, so it is worth reading the definition in your own policy.

Sources

1. MoneyHelper: What is buildings insurance? checked 2 Oct 2026
2. MoneyHelper: What is contents insurance? checked 2 Oct 2026
3. MoneyHelper: Help buying home insurance checked 2 Oct 2026
4. MoneyHelper: Buildings insurance, what does a good policy look like? checked 2 Oct 2026
5. MoneyHelper: Flood insurance, getting the right cover checked 2 Oct 2026
6. Financial Ombudsman Service: Underinsurance in home insurance complaints checked 2 Oct 2026
7. Financial Ombudsman Service: Unoccupied properties checked 2 Oct 2026
8. MoneyHelper: Why providers might reject your insurance claim checked 2 Oct 2026
9. FCA: Measures to protect customers from the loyalty penalty in home and motor insurance (28 May 2021) checked 2 Oct 2026
10. Flood Re: About us checked 2 Oct 2026
11. Flood Re: Eligibility criteria checked 2 Oct 2026

This guide is general information about how insurance works in the UK. It isn't advice and doesn't take your circumstances into account. Policies differ: your own policy documents are what count.