Your home is probably the most valuable item you own, so make sure you insure it properly. Recent floods and storms have underlined the dangers of going without cover, causing hundreds of millions pounds worth of damage. Yet nearly 10 million of the UK's 25 million households do not have buildings insurance and according to the Association of British Insurers, six million have not insured their contents.
Household insurance is split into two parts, buildings and contents cover. You can buy them separately from different insurance companies, but most homeowners get them from the same company, which saves money and makes claiming easier.
Buildings insurance covers the structure of your home and permanent fixtures and fittings such as your bath, toilets, bedroom cupboards and fitted kitchens. Your garage, greenhouse and garden shed should also be covered, but some policies exclude boundary walls, fences, gates, paths, drives and outdoor swimming pools, so check the small print carefully. Not everyone needs buildings insurance. If you rent, your landlord should cover it. If you own a leasehold flat, the freeholder should be responsible.
Contents insurance covers everything you would take with you if you moved, including furniture, furnishings, kitchen equipment, food and drink, electrical goods, clothing and valuables. Cars, caravans and boats must usually be insured separately.
Policies offer either "replacement as new", where the full cost of repairing or replacing lost or damaged items is met by the policy, or "indemnity cover", where a reduction is made to account for wear, tear and depreciation. Both types of policy typically cover loss or damage to the building and its contents following fire, lightning, explosion, earthquake, theft, riot, malicious acts, storm and flood, and so on. Keep your cover up to date by index-linking your policy. This means your premiums will rise each year to meet the increasing cost of making good any loss or damage to your home or its contents.