First-Time Buyer's Guide to Household Insurance

Why You Need Household Insurance

Congratulations on buying your first home! It's likely the biggest purchase you'll ever make, and protecting it should be a top priority. Household insurance safeguards your property and possessions against unexpected events like fire, flood, theft, and accidental damage.

While household insurance isn't a legal requirement, if you have a mortgage, your lender will almost certainly require you to have buildings insurance in place. This protects their security (your home) as well as your investment.

Key Point: Your mortgage lender will typically require buildings insurance to be in place from the date of exchange, not completion. Make sure you arrange cover in good time.

Buildings vs Contents Insurance

Understanding the difference between buildings and contents insurance is fundamental for first-time buyers. They protect different things and you'll likely need both.

Buildings Insurance

Buildings insurance covers the permanent structure of your home and anything that would stay if you moved out. This includes:

The structure: Walls, roof, floors, ceilings, and foundations
Permanent fixtures: Fitted kitchens, bathrooms, and built-in wardrobes
Fixed installations: Central heating, plumbing, and electrical wiring
External elements: Garages, sheds, fences, gates, and driveways

Buildings insurance protects against perils such as fire, flood, storm damage, subsidence, escape of water, and impact damage (e.g., a vehicle hitting your property).

Contents Insurance

Contents insurance covers your personal belongings—essentially, anything that would fall out if you turned your house upside down. This includes:

Furniture: Sofas, beds, tables, chairs, and freestanding wardrobes
Electronics: TVs, computers, phones, and gaming consoles
Clothing: Your wardrobe and personal accessories
Kitchen items: Appliances, cookware, and crockery
Valuables: Jewellery, watches, art, and collectibles

Contents insurance typically covers theft, accidental damage (if selected), fire, and flood damage to your belongings.

Combined Policies: Most insurers offer combined buildings and contents policies, which can be more convenient and sometimes more convenient than buying separately.

When to Arrange Cover

Timing is crucial when arranging household insurance for your first home. Here's a typical timeline:

Before Exchange of Contracts

Start getting quotes and comparing policies. You'll need to have buildings insurance ready to go live from the date of exchange. Your solicitor will confirm the exact date.

At Exchange

From the moment contracts are exchanged, you have a legal interest in the property. Your buildings insurance should be active from this date, even though you won't own the property until completion.

At Completion

On completion day, you become the legal owner. Your contents insurance should start from this date (or when you move your belongings in). Update your buildings policy with any final details.

Get buildings insurance quotes at least 2 weeks before exchange
Confirm the exchange date with your solicitor
Arrange buildings cover to start from exchange date
Set up contents cover to start from completion/moving day
Keep policy documents safe and accessible

Calculating the Right Cover

Buildings Sum Insured

The buildings sum insured should be the rebuild cost, not the market value or purchase price. The rebuild cost is what it would cost to completely rebuild your home from scratch, including demolition, materials, and labour.

For most standard properties, you can estimate the rebuild cost using:

BCIS Calculator: The Building Cost Information Service provides a free online calculator based on your property type and location
Mortgage valuation: Your lender's valuation report may include a rebuild estimate
Professional survey: For unusual or older properties, consider a full rebuilding cost assessment

Warning: Underinsuring your buildings can have serious consequences. If you're underinsured and make a claim, the insurer may reduce your payout proportionally (this is called 'average').

Contents Sum Insured

Add up the replacement cost of everything you own. This is often more than people expect. A typical first home might have £30,000-£50,000 worth of contents.

Consider:

Furniture in every room
All clothing and shoes
Electronics and appliances
Books, CDs, DVDs, and games
Kitchen equipment and food
Garden furniture and tools
Jewellery and watches

Create a home inventory—it helps ensure accurate cover and speeds up claims if the worst happens.

Optional Extras to Consider

Standard household policies cover the basics, but you may want to add extra protection:

Accidental Damage

Covers unintentional damage like spilling paint on carpets, drilling through pipes, or children breaking windows. Without this, you're only covered for specific perils like fire and theft.

Home Emergency Cover

Provides 24/7 access to tradespeople for emergencies like burst pipes, boiler breakdowns, broken locks, or electrical failures. Particularly valuable for first-time buyers who may not have established tradesperson contacts.

Legal Expenses Cover

Covers legal costs for property disputes, personal injury claims, and employment issues. Often available for a small additional premium.

Personal Possessions Cover

Extends contents cover to protect items when you take them outside the home—laptops, phones, cameras, and jewellery.

Specified Items

High-value items like engagement rings, expensive watches, or artwork may exceed standard single-item limits. Specifying them individually ensures full cover.

Common First-Time Buyer Mistakes

Avoid these common pitfalls when arranging your first household insurance:

1. Confusing Market Value with Rebuild Cost

Your home's market value includes land, location, and demand. The rebuild cost is just the building itself. In expensive areas, the rebuild cost may be much lower than the purchase price. In lower-value areas, it might be higher.

2. Underestimating Contents Value

Most people significantly underestimate what they own. Take time to properly value your contents—it's worth it when you need to claim.

3. Not Reading the Policy

Understand what's covered and what's excluded. Pay attention to single-item limits, excess amounts, and any conditions (like security requirements).

4. Forgetting to Update Cover

As you buy new furniture, electronics, or make home improvements, your cover needs may change. Review your policy annually.

5. Choosing on Price Alone

The lowest-cost policy isn't always the best. Consider cover levels, excesses, and the insurer's claims reputation. A broker can help you compare like-for-like.

Use rebuild cost, not market value, for buildings cover
Create a detailed home inventory for contents
Read the policy document, especially exclusions
Consider accidental damage cover for peace of mind
Review and update your cover annually

Getting Started

As an independent broker, we can help you find the right household insurance for your first home. We'll explain your options clearly, compare policies from multiple insurers, and ensure you have appropriate cover in place.

To get started, we'll need:

Your property address and postcode
Property type (detached, semi, terraced, flat)
Year of construction
Number of bedrooms and bathrooms
Estimated rebuild cost (we can help calculate this)
Estimated contents value
Any previous claims

Contact us for a no-obligation conversation about protecting your first home. We're here to answer your questions and guide you through the process.