There are two main types of home insurance: buildings  insurance and contents insurance.

Buildings insurance

This covers the building itself against things like fire or flood. It will also cover permanent or fitted fixtures and fittings in  your home and garden, and any outbuildings that form part  of your home.

If you own your home, buildings insurance is absolutely essential. If you have a mortgage, your lender will almost certainly demand you have a policy in place as a condition of your loan.

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How much do I need? The sum you are insured for should be sufficient to cover the  full cost of rebuilding your property. Different insurers will have different ways of calculating rebuild costs. Some will ask you for the amount stated on your home survey, while others will calculate the amount based on the number of bedrooms you have and the information you’ve provided. Most policies will have a standard level of cover, although some policies go further, offering ‘unlimited’ cover and you could be paying for a higher cover amount than that required. It’s worth stressing that your rebuilding cost is not the same as the market value of your property.

Contents insurance

Contents insurance protects your household goods and  personal possessions, such as electrical goods, jewellery,  clothes and furniture.

You can usually add various options to your contents insurance that will provide additional cover. Two common enhancements are accidental damage cover and cover for possessions outside of the home. Some insurers include these additional options as standard.

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How much do I need? Most insurers will offer a standard level of cover, usually between £30,000 and £50,000. This will be sufficient for most households, but it’s important not to underestimate the value of your possessions.

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Will I be covered for accidents? The majority of contents insurance policies will automatically cover you for the consequences of specific events, such as flood and fire. But not all will include ‘accidental damage’ as standard.

What about my portable possessions? If you take valuable items away from your home regularly, you should consider personal possessions cover (sometimes referred to as ‘all risks’ cover). When you go abroad you may want to take your favourite gadgets, clothes, watches and jewellery with you. On the whole, these wouldn’t be covered under a standard contents policy unless you specifically select ‘worldwide cover’.

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Should I insure my valuables separately? There are two types of personal possessions: specified and unspecified. Unspecified possessions will be covered up to a specific limit (such as £1,500). But, if you have items worth more, you should declare each item individually (making them ‘specified possessions’) to ensure they are covered.

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What isn’t covered? If you leave your property unattended for a long period of time (in most cases more than 60 days), your insurance may not be valid – particularly for damage caused by things like water leaks. Other common exclusions include damage caused by war or acts of terrorism, and damage to gates and fences caused by storms  or floods.