“Do I really need home insurance?” is a fair question, especially if you’re a first time buyer. It’s not just a formality, it’s a necessity to prevent you from being out of pocket in the event of damage to your home, and sometimes your personal property too.
First of all, what is home insurance?
As you might guess from the name, home insurance protects your home. You can choose building insurance, contents insurance, or both.
Buildings insurance covers your home for damage caused by accidents or extreme weather, such as fires, storms or flooding. If you choose contents insurance (which majority of home insurers include or offer as an add-on) it covers the repair or replacement of personal items if they’re stolen or damaged.
In simple terms, purchasing home insurance provides additional peace of mind that your home and/or belongs are protected.
Exclusions apply. Please refer to your policy wording booklet to see what is and isn’t covered.
What’s the likelihood of having to use home insurance?
In 2022 the UK Fire and Rescue Services attended 185,437 fire incidents (Source: GOV.UK), and in 2023 it was estimated that 5.5 million homes and businesses in England were at risk of flooding (Source: GOV.UK).
Providing the home and contents can partially be recovered, the average fire restoration cost is a massive £35,681 (Source: Checkatrade). Needless to say, that is a huge amount of financial stress to add to an already difficult situation.
Meanwhile, a flooded home costs an average of £4500 to repair (Source: This is Money) – not quite the shocking figure that the average fire restoration costs, but still a large sum of money to pay out for the average UK homeowner.
Home insurance not only protects you from these costs, but can also provide coverage for additional living expenses if you are forced to temporarily relocate into alternative accommodation due to damage to your home. This can include the cost of a hotel, meals, and other expenses while your home is being repaired.
Finally, having buildings insurance is a requirement of mortgage lenders. As you can tell from the statistics, it’s not just a formality. Mortgage lenders need to make sure that the property they are lending on is protected, to reduce losses not just for themselves but for the home owners too.
Looking for home insurance?
If this article has done its job in demonstrating why home insurance is so important, speak to your financial adviser to get a quote.
Sources:
GOV.UK (Fire and Rescue Incident Statistics England Year Ending September 2022)
CheckATrade (Fire Damage Restoration Cost)
This is Money (A Flooded Home Costs £4500 Repair Research Shows)