How Do I Choose The Right Home Insurance Policy?
Choose the right home insurance by matching the cover type to your situation (buildings, contents, or combined), setting the sum insured to the full rebuild cost and accurate contents value, picking an excess you can genuinely afford, and comparing like-for-like quotes across insurers.
The cheapest premium is rarely the best value once cover limits and exclusions are factored in.
UK home insurance is not a one-size-fits-all product. The right policy depends on whether you own, rent, lease, or let, the construction of the property, what your belongings are worth, and how much risk you are willing to carry yourself.
This guide walks through the eight decisions that matter, with concrete numbers and the UK-specific rules that decide whether your policy pays out.
Match the cover type to your situation, insure buildings at full rebuild cost and contents at true replacement value, and pick an excess you could actually pay. Under-insuring triggers the average clause and cuts every payout proportionally.
Compare home insurance quotes on identical cover, excess, and add-ons to make sure the cheapest one is like-for-like.
- What type of home insurance do you need?
- How much cover should you get?
- What excess should you choose?
- Which optional extras are worth considering?
- How do you compare quotes fairly?
- What should you check in the policy wording?
- Does your property type affect your options?
- What affects your home insurance premium?
- Frequently asked questions (FAQs)
What type of home insurance do you need?
There are three main types: buildings insurance covers the structure, contents insurance covers your belongings, and combined policies bundle both. The right choice depends on whether you own or rent, and on who is responsible for the structure.
Buildings insurance
Buildings insurance covers the permanent structure: walls, roof, floors, fitted kitchens, bathrooms, plumbing, wiring, and outbuildings such as garages and sheds. Standard perils include fire, storm, flood, subsidence, escape of water, and vandalism.
Mortgage lenders require buildings cover as a condition of the loan. Outright owners are not legally required to buy it, but structural repairs can easily run to tens of thousands of pounds.
Contents insurance
Contents insurance covers your moveable belongings: furniture, electronics, clothing, kitchenware, and personal items. The easy test is the “upside-down house” rule, where anything that would fall out is broadly what contents insurance covers.
Most households badly underestimate the replacement value of what they own, which is the single biggest cause of claim shortfalls.
Combined policies
Combined buildings and contents policies give you one insurer, one renewal date, and one claims process. They are usually cheaper than two standalone policies and suit owner-occupiers with both structure and belongings to protect.
Who needs what
| Situation | Buildings | Contents |
| Homeowner with mortgage | Required by lender | Strongly advised |
| Outright owner | Strongly advised | Strongly advised |
| Private tenant | Landlord’s responsibility | Your responsibility |
| Leaseholder (flat) | Freeholder arranges (via service charge) | Your responsibility |
| Landlord (letting out) | Landlord insurance | Landlord insurance (for furnishings you provide) |
How much cover should you get?
Insure buildings for the full rebuild cost, not the market value, and insure contents for the replacement cost of every moveable item in the home. Getting both figures right is what prevents the average clause from reducing your payout at claim time.
Calculating your rebuild cost
The rebuild cost is what it would cost to rebuild your home from scratch, including materials, labour, demolition, and professional fees. It is usually lower than the market value because it excludes the land.
Check your rebuild figure on your most recent mortgage valuation, use the BCIS calculator from the Royal Institution of Chartered Surveyors, or commission a professional surveyor for unusual or listed properties.
Valuing your contents
Go room by room and list every item with the cost to replace it new. Include furniture, electronics, kitchen equipment, clothing, curtains, unfitted carpets, toys, tools, and garden equipment.
Take photos or video of each room as a record, and store the inventory in cloud storage so you can access it if your home becomes uninhabitable.
The under-insurance trap
If your sum insured is lower than the true rebuild or replacement value, insurers can apply the “average clause” under CIDRA 2012 and cut every payout proportionally.
Worked example: if your true rebuild cost is £300,000 but you insure for £200,000, you are 33% under-insured. A £15,000 partial damage claim is scaled back to £10,000 under the average clause.
What excess should you choose?
The excess is what you pay towards every claim before the insurer pays the rest, split into compulsory (set by the insurer) and voluntary (chosen by you). Pick the highest voluntary excess you can genuinely afford at short notice.
Compulsory vs voluntary
Compulsory excesses are fixed by the insurer and vary by peril. Voluntary excess is the amount you choose to add on top, and raising it cuts your premium, often by 10-20%.
Can you afford it if you claim?
A high voluntary excess saves money now but costs money later, because the excess is payable upfront before the insurer covers anything. A £1,000 excess is only sensible if you have £1,000 in accessible savings.
Peril-specific excesses
Some perils carry a higher compulsory excess regardless of your voluntary choice. Subsidence excesses are commonly £1,000 on standard properties, and escape of water excesses can also be loaded, so check the policy schedule for excesses by peril type.
Which optional extras are worth considering?
The four extras that earn their cost for most households are accidental damage, personal possessions, home emergency, and legal expenses. Only add extras that match your actual risks and lifestyle.
Accidental damage
Standard policies pay for damage from specific insured events, so accidental damage extends cover to unintentional one-off incidents, such as spilling paint on a carpet, drilling through a pipe, or a child breaking a window. Typically adds 10-20% to the premium.
Personal possessions away from home
Standard contents cover stops at the front door. Personal possessions cover extends protection to phones, laptops, jewellery, and bikes when you are out, usually with a per-item limit of £1,500-£2,500.
Home emergency cover
Covers emergency callouts for boiler breakdowns, burst pipes, electrical failures, or lost keys, and often includes temporary accommodation if your home becomes uninhabitable. Compare against standalone boiler cover to see which offers better value.
Legal expenses cover
Covers legal costs for disputes tied to your property, including boundary disagreements, employment disputes, and personal injury claims. Usually under £30 a year and useful if you want cover for solicitor fees you would otherwise pay out of pocket.
Add-on comparison at a glance
| Add-on | Typical cost | Worth it if… |
| Accidental damage | +10-20% of premium | Young children, pets, or busy household |
| Personal possessions | +£30-£80 / year | You regularly carry phones, laptops, or jewellery out |
| Home emergency | +£40-£80 / year | You have no standalone boiler or plumbing cover |
| Legal expenses | +£15-£30 / year | You want cover for boundary or employment disputes |
How do you compare quotes fairly?
Like-for-like comparison means every variable must be identical across quotes: sum insured, excess, add-ons, and property details. A lower premium only matters if the cover matches.
Set your baseline first
Calculate your rebuild cost and contents value before you start getting quotes. Every quote needs to be based on the same figures, or the comparison is meaningless.
Use comparison sites and go direct
Comparison sites are efficient for a first pass, but some insurers (notably Direct Line and Aviva) do not appear on them, so check directly too. MoneyHelper also publishes free guidance on shopping around without being steered by commercial tie-ins.
Read the policy summary
Look at coverage limits per item, exclusions, and the claims process before choosing on price alone. A cheap policy with a low single-item limit can leave you £3,000 short on a jewellery claim.
FCA pricing rules at renewal
Since January 2022, the FCA General Insurance Pricing Practices rules stop insurers from charging renewing customers more than equivalent new customers. Premiums still vary widely between insurers, so shopping around at renewal remains worthwhile.
What should you check in the policy wording?
Before committing, check single-item limits, unoccupancy clauses, maintenance conditions, lock and alarm requirements, and the claims notification period. These clauses decide whether the policy actually pays when you need it.
Single-item limits
Most policies cap the payout for any individual item at around £1,500-£2,500 unless you list it separately. Jewellery, art, musical instruments, or specialist equipment over the limit must be specified.
Unoccupancy clause
Most policies exclude or reduce cover once the home is unoccupied for 30-60 consecutive days. For extended travel, probate, or renovation, unoccupied property insurance fills the gap.
Maintenance and wear and tear
Insurers expect you to keep the property in good repair. Damage from a leaking roof you knew about, or rot you ignored, is not covered because it is classed as gradual or preventable.
Locks and security requirements
Many policies require five-lever mortice deadlocks on external doors and key-operated window locks. If you do not meet the spec and are burgled, the insurer can refuse or reduce the claim.
Claims notification period
Most policies require you to notify a claim within 30 days of the incident. Late notification can void cover, even if the claim itself is genuine.
Does your property type affect your options?
Yes. The construction, age, and history of your property decide which insurers will cover you, how much you pay, and what exclusions apply.
Standard vs non-standard construction
Standard-construction homes (brick walls, tile or slate roof) attract the widest insurer panels and the most competitive premiums. Non-standard home insurance is needed for timber frame, thatched roof, flat roof, or prefabricated construction.
Property type at a glance
| Property type | Insurer availability | Premium impact |
| Standard brick-and-tile | Widest panel | Lowest |
| Flats and apartments | Wide (contents only) | Low |
| Listed buildings | Specialist only | Higher |
| Thatched / timber frame | Specialist only | Much higher |
| Flood-prone properties | Limited + Flood Re | Higher flood excess |
| Subsidence history | Specialist or loaded | Higher excess (£1,000+) |
What affects your home insurance premium?
Premiums are risk-priced by location, claims history, property type, security, and payment method. Understanding the levers that matter helps you bring the premium down without cutting the cover you need.
Location (Postcode)
Your postcode drives risk scores for burglary, flooding, subsidence, and storm damage. Two identical homes a mile apart can attract premiums that differ by 20-40%.
Claims history
Previous claims sit on the industry Claims and Underwriting Exchange (CUE) database for six years. More claims generally mean higher premiums, and undisclosed claims can void cover.
Security
Approved locks, burglar alarms, and security lighting cut premiums on most policies. Some insurers require specific measures as a condition of cover in higher-risk postcodes.
Payment method
Paying annually is always cheaper than monthly because monthly payments include interest. The typical cost of paying monthly is 5-10% on top of the annual premium.
Excess level
A higher voluntary excess reduces the premium, typically by 5-15% depending on insurer. Weigh the saving against whether you could actually pay the excess if you claim.
Frequently asked questions (FAQs)
No, home insurance is not legally required. If you have a mortgage, your lender will almost certainly require buildings insurance as a condition of the loan, but contents insurance is always optional.
If your sum insured is lower than the actual rebuild or contents value, your insurer can apply the average clause and cut your payout proportionally. Insuring for half the true value means receiving only half of any claim settlement.
Yes, but cancellation fees may apply. Under FCA rules a 14-day cooling-off period applies to every new policy during which you can cancel with minimal cost, after which cancellation terms are set by the insurer.
At least once a year at renewal, and any time you make a major change, such as home improvements, high-value purchases, letting a room, starting a home business, or extended travel.
Weigh the repair cost against the excess and the likely premium uplift. Claims sit on CUE for six years and usually push future premiums up, so a claim close to the excess is often cheaper to pay yourself.
The average clause lets an insurer reduce a payout proportionally if your sum insured is lower than the true rebuild or replacement value. It applies to partial claims too, not only total losses.
Yes, if any single item is worth more than the policy single-item limit (usually £1,500-£2,500). Jewellery, watches, art, and musical instruments above that threshold must be specified or the payout is capped.
Yes, almost always. Monthly payments include interest that typically adds 5-10% to the total, so pay annually if you can afford it.
The FCA rule stops insurers charging renewing customers more than new customers for equivalent cover. It does not stop different insurers pricing the same risk very differently, so shopping around at renewal still saves money.