Home insurance protects your property and belongings against damage, theft, and a range of other risks. According to the Association of British Insurers (ABI), UK insurers pay out over £7 million in home insurance claims every single day. A typical combined buildings and contents policy for a standard three-bedroom semi-detached house costs between £180 and £350 per year in 2026. Home insurance is not a legal requirement in the UK, but if you have a mortgage, your lender will almost certainly require you to have buildings insurance as a condition of the loan. This guide explains what home insurance covers, what it costs, and how to find the right policy for your situation.
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What Is Home Insurance?
Home insurance is a policy that protects your property and the things inside it against risks such as fire, theft, storm damage, flooding, and escape of water. It is one of the most common types of insurance in the UK, yet the ABI estimates that only around 69% of UK adults have contents insurance, meaning nearly a third of households have no cover for their belongings at all.
There are two main types of home insurance:
- Buildings insurance covers the physical structure of your home: the walls, roof, floors, ceilings, fitted kitchens, bathrooms, windows, doors, garages, fences, driveways, permanent fixtures, and the pipes and cables within the property.
- Contents insurance covers your personal belongings: furniture, electronics, clothing, jewellery, appliances, soft furnishings, and other movable items inside the home.
Most homeowners buy a combined policy that covers both the building and its contents under a single premium. Combined policies are usually cheaper than purchasing buildings and contents insurance separately, and they simplify the claims process because you deal with one insurer.
Home insurance is not required by law. However, if you have a mortgage, your lender will require you to maintain buildings insurance for the duration of the loan. The gov.uk home insurance guidance provides a helpful overview of the basics.
Buildings Insurance, Contents Insurance, or Both?
This is the first decision every homeowner or tenant faces. The answer depends on your situation.
Buildings insurance covers the cost of repairing or rebuilding the physical structure of your home. This includes walls, the roof, floors, fitted kitchens and bathrooms, garages, outbuildings, boundary walls, fences, driveways, paths, and permanent fixtures like boilers and pipes. It is based on the rebuild cost of your property, not its market value. If your home were destroyed by fire and needed to be rebuilt from scratch, buildings insurance would cover that cost.
Contents insurance covers everything you would take with you if you moved house: furniture, electronics, clothing, jewellery, kitchen appliances, bedding, artwork, musical instruments, and personal items. The ABI reports that the average contents insurance claim in the UK is approximately £4,500. Without contents cover, you would need to replace all of these items at your own expense after a theft, fire, or flood.
Combined cover bundles both into a single policy. This is the most common choice for homeowners and typically works out cheaper than buying buildings and contents separately. You also have the convenience of dealing with a single insurer if you need to claim.
Who needs what
- Homeowners with a mortgage: Buildings insurance is required by your lender. Contents insurance is strongly recommended.
- Homeowners without a mortgage: Neither is legally required, but both are strongly recommended. If your home suffered serious damage, you would bear the full cost without buildings cover.
- Tenants and renters: Your landlord's insurance covers the building. You only need contents insurance to protect your own belongings.
- Landlords: You need specialist landlord insurance that covers the building, liability, and rental income protection. Standard home insurance does not cover properties let to tenants. See our guide to cheap landlord insurance in the UK for ways to reduce costs.
How Much Does Home Insurance Cost in 2026?
Here are realistic cost ranges based on published industry data for a typical three-bedroom semi-detached home with standard brick and tile construction, no flood risk history, and standard security:
Cost by property type
Premiums vary significantly depending on the type of property you live in. Detached homes cost more to insure because they have a larger structure and greater rebuild value. Flats tend to be cheapest because buildings insurance is usually covered by the freeholder's policy.
ABI data indicates that home insurance premiums rose by 8 to 15% across 2025 and into 2026, driven by increased claims from severe weather events and rising construction and materials costs. For a detailed breakdown of contents cover pricing, see our guide to average contents insurance for a 3-bed house.
What affects the price most
- Property type and construction. Standard brick and tile homes are cheapest to insure. Non-standard construction such as thatched roofs, timber frames, or flat roofs attract higher premiums.
- Location. Properties in areas with higher flood risk, crime rates, or subsidence history cost more. London and Manchester premiums reflect local risk profiles.
- Rebuild value. This is the cost to rebuild your home from scratch, not its market value. Getting this wrong directly affects your premium and claim payouts.
- Contents value. The total replacement cost of everything you own. Overestimating means you pay more than necessary. Underestimating means you may not receive the full payout on a claim.
- Security. Approved locks, burglar alarms, and CCTV can reduce premiums.
- Claims history. Previous claims increase future premiums. A clean claims history keeps costs down.
- Voluntary excess. Choosing a higher voluntary excess reduces your premium, but increases what you pay out of pocket when you claim.
- Your occupation and age. Some occupations and age groups are statistically lower risk. Over 50s may find competitive rates from specialist providers.
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What Home Insurance Covers (and What It Does Not)
Understanding exactly what your policy includes prevents unpleasant surprises at claim time. Here is what a typical combined policy covers and what it does not:
Coverage gaps people miss
Working from home. Standard contents insurance typically does not cover business equipment such as laptops, monitors, or stock you keep at home for work purposes. If you work from home, check whether your policy includes business equipment or whether you need a home office extension.
Unoccupied property. Most policies reduce or completely exclude cover if your home is empty for more than 30 consecutive days. This affects holiday homes, properties between tenancies, and homes left empty during extended travel. See our guides to unoccupied home insurance and empty house insurance for specialist options.
High-value single items. Individual items worth more than £1,000 to £1,500 (the limit varies by insurer) usually need to be listed separately on your policy as specified items. Jewellery, watches, artwork, and high-end electronics are commonly affected. If you do not declare them, they may not be fully covered.
Accidental damage. This is not always included as standard. Many policies offer it as an optional add-on. Without it, accidentally spilling paint on a carpet or putting your foot through a ceiling while in the loft would not be covered.
The Citizens Advice insurance guidance explains your rights when making a claim and what to do if your insurer rejects it.
How to Calculate Your Rebuild Cost (and Why It Is Not Your Home's Market Value)
This is one of the most commonly misunderstood aspects of home insurance. Your rebuild cost and your home's market value are two different figures, and confusing them can mean you are significantly over-insured or under-insured.
Rebuild cost is the amount it would cost to completely demolish and rebuild your home from scratch. This includes demolition, site clearance, materials, labour, architect and surveyor fees, and compliance with current building regulations. For most homes, the rebuild cost is lower than the market value.
Market value includes the land your home sits on, the location premium, supply and demand in the local housing market, and factors like proximity to schools and transport. None of these are relevant to rebuilding the physical structure.
How to estimate your rebuild cost
- RICS/ABI rebuild cost calculator. The Royal Institution of Chartered Surveyors provides a free calculator through the ABI. You enter basic details about your property and it estimates the rebuild cost. Visit the ABI rebuild cost calculator page to use it.
- Your mortgage valuation survey. If you bought your home with a mortgage, the surveyor's report should include a rebuild cost estimate. Check your paperwork.
- A full building survey. For non-standard properties such as listed buildings, period properties, or homes with unusual construction, a professional survey gives the most accurate figure.
Getting it wrong
If your rebuild cost is too low, you are under-insured. In the event of a major claim, your insurer may reduce the payout proportionally using a clause called "average." If your rebuild cost is too high, you are simply paying a higher premium than necessary for cover you do not need.
How to Compare Home Insurance Quotes
Not all home insurance policies are the same. Two policies at different prices may offer very different levels of protection. Here is a practical checklist for comparing effectively:
- Check your rebuild value and contents value before comparing. Inaccurate figures lead to inaccurate quotes. Use the ABI calculator for rebuild cost and do a room-by-room inventory for contents.
- Compare like for like. Make sure you are comparing the same excess level, the same cover type (buildings, contents, or combined), and the same optional add-ons.
- Look beyond the headline price. The cheapest quote may have a very high excess, low single-item limits, or an indemnity settlement basis rather than new-for-old replacement.
- Check whether accidental damage is included. Some policies include it as standard; others charge extra. This makes a significant difference to your actual level of cover.
- Check the unoccupied property clause. Policies vary on how many consecutive days the property can be empty before cover is reduced. This matters if you travel frequently or have a second home.
- Read the exclusions section. The cover summary tells you what is included. The exclusions section tells you what is not. Always read both.
- Consider the insurer's claims reputation. The cheapest policy is poor value if the insurer makes the claims process difficult. Check independent reviews and complaints data.
The MoneyHelper home insurance guide offers free, impartial advice on understanding policy terms and choosing the right level of cover.
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Practical Ways to Reduce Your Home Insurance Costs
Most guides tell you to increase your excess and shop around. That is a start, but here are more specific, actionable ways to lower your premium:
Increase your voluntary excess, but only to a level you can afford. Setting your excess at £250 or £500 instead of £100 will reduce your premium. But if you cannot afford to pay that amount when you claim, you will face problems. Choose an amount that balances savings against what you could genuinely pay out of pocket.
Improve your home security. Fitting British Standard locks (BS3621) on all external doors, a monitored burglar alarm, and visible CCTV can reduce premiums by 5 to 15% with some insurers. Insurers view better security as lower theft risk.
Pay annually instead of monthly. Paying monthly typically adds 10 to 20% to the total cost because monthly payments include interest. If you can afford to pay upfront, do so.
Combine buildings and contents with the same insurer. Most insurers offer a discount for combined policies compared to buying each separately.
Do not auto-renew without comparing first. The FCA banned loyalty pricing penalties in January 2022, meaning insurers cannot charge existing customers more than new customers for equivalent cover. However, comparing quotes each year still frequently finds cheaper options because your circumstances and the market change.
Set an accurate contents value. Many people overestimate the total value of their belongings, which inflates their premium. Do a realistic room-by-room inventory rather than guessing a round number.
Check for multi-policy discounts. Some insurers offer discounts if you hold both car and home insurance with them. It is worth checking, though always compare the combined cost against separate policies from different providers.
Consider short-term home insurance if you only need cover temporarily. If you are between properties or covering a rental for a few months, you may not need a full annual policy.
The FCA consumer insurance guidance explains your rights as an insurance customer, including the rules on pricing practices.
Home Insurance for Specific Situations
Standard home insurance works well for a typical owner-occupied property, but many homeowners have circumstances that require specialist cover. Here is a brief overview of the most common situations, each with a link to our detailed guide.
Landlords. If you let your property to tenants, you need specialist landlord insurance, not a standard home policy. Landlord cover includes buildings insurance, property owner's liability, and optional rent guarantee cover. Standard home insurance will not pay out if the property is tenanted. See also our guide to cheap landlord insurance in the UK.
Listed buildings. Grade I and Grade II listed properties must be repaired using original materials and approved methods, which makes rebuilding far more expensive. Specialist listed buildings insurance accounts for these higher rebuild costs.
Thatched properties. Thatched roofs present a significantly higher fire risk, and premiums for thatched roof insurance have risen sharply in recent years. Specialist providers are essential for this type of property.
Flood risk properties. If your home is in a flood risk area, standard insurers may charge much higher premiums or decline cover entirely. The Flood Re scheme helps make flood cover affordable by capping the flood element of your premium. See our guide to flood risk property insurance for more detail.
Second homes and holiday lets. Properties that are not your primary residence need specific policies that account for periods of non-occupation. Standard policies may not cover a second home adequately.
Park homes. Mobile homes and park homes are not covered by standard home insurance policies. You need a dedicated park home insurance policy designed for this type of property.
Unoccupied properties. If your home will be empty for more than 30 consecutive days, most standard policies reduce or exclude cover. Specialist unoccupied property insurance fills this gap. If the property is permanently empty, see our guide to empty house insurance.
Probate properties. Inherited homes often sit empty during the probate process, creating an insurance gap. Specialist probate house insurance provides cover during this period.
How to Make a Home Insurance Claim
If you need to make a claim, following the right steps from the start gives you the best chance of a smooth process.
Step 1: Secure your home and prevent further damage. If it is safe to do so, take reasonable steps to prevent the damage from getting worse. For example, turn off the water supply if a pipe has burst, or board up a broken window. Your insurer expects you to mitigate further loss where possible.
Step 2: Contact your insurer as soon as possible. The claims telephone number is on your policy documents and usually on the insurer's website. Most insurers have dedicated claims lines available 24 hours a day. For urgent situations, consider emergency home insurance options.
Step 3: Document the damage thoroughly. Take photographs of all damage before any cleanup or repairs. Keep receipts for any emergency spending. Make a detailed list of damaged, destroyed, or stolen items, including their approximate age and value.
Step 4: Report to the police if relevant. If the claim involves theft, burglary, vandalism, or any criminal damage, report it to the police and obtain a crime reference number. Your insurer will require this.
Step 5: Wait for your insurer's assessment. For smaller claims, your insurer may settle based on your documentation. For larger or more complex claims, they may send a loss adjuster to inspect the damage in person and verify the claim.
Step 6: Receive your settlement. Depending on your policy terms, settlement is either on a new-for-old basis (you receive the cost of a brand new replacement) or an indemnity basis (you receive the current value of the item, accounting for age and wear). Check which basis your policy uses before you need to claim.
Step 7: Your excess is deducted. The agreed excess amount is deducted from your payout. If your claim is for £3,000 and your excess is £250, you receive £2,750.
FCA data shows that approximately 72% of combined home insurance claims are accepted. The average home insurance claim value is around £4,530. Be aware that making a claim may increase your premium at renewal, even if the claim was not your fault.
Frequently Asked Questions About Home Insurance
Is home insurance a legal requirement in the UK?
No. There is no law requiring you to have home insurance. However, if you have a mortgage, your lender will require you to maintain buildings insurance as a condition of the loan. Without a mortgage, the decision is yours, but going without cover means bearing the full cost of any damage or loss.
Do I need buildings insurance if I own my home outright?
It is not legally required, but it is strongly recommended. If your home suffered a fire, flood, or structural damage, the repair or rebuild cost could run into hundreds of thousands of pounds. Buildings insurance protects you against that financial risk.
How much contents insurance do I need?
You need enough to cover the total replacement cost of everything you own. The best approach is to go room by room, listing items and their approximate replacement values. Include furniture, electronics, clothing, kitchenware, jewellery, and personal items. Most people underestimate. A typical three-bedroom home often has £35,000 to £50,000 worth of contents.
What is the difference between new-for-old and indemnity cover?
New-for-old cover pays the full cost of replacing a damaged or stolen item with a brand new equivalent, regardless of the item's age. Indemnity cover pays only the current value of the item, taking into account age and wear. New-for-old is the better option for most people, but it usually costs more.
Does home insurance cover my garden?
Most policies provide limited cover for garden items such as furniture, tools, sheds, and plants. However, the limits are usually capped at a relatively low amount, often £500 to £1,000 for plants and trees. Storm damage to fences is commonly covered, but check your policy's specific garden limits.
Am I covered if I work from home?
Standard contents insurance may not cover business equipment, stock, or liability related to working from home. If you use expensive equipment for work or hold stock at your home, check with your insurer whether you need a home office extension or a separate business insurance policy.
What happens if my home is unoccupied for more than 30 days?
Most standard home insurance policies reduce or exclude cover after 30 consecutive days of the property being empty. This commonly affects people on extended holidays, landlords between tenancies, and owners of inherited properties. If your home will be empty for a prolonged period, you need specialist unoccupied property insurance.
Does home insurance cover flooding?
Most standard policies include flood cover, but properties in high-risk flood areas may face higher premiums, larger excesses, or exclusions. The Flood Re scheme, backed by the government and insurers, helps make flood cover affordable for homes in flood-prone areas. See our guide to flood risk property insurance.
Can I get home insurance with a history of subsidence?
Yes, but it will be more difficult and more expensive. You will need to declare any history of subsidence when applying. Some mainstream insurers decline properties with subsidence history, but specialist providers can usually offer cover. Expect a higher excess on subsidence-related claims, often £1,000 or more.
What is accidental damage cover?
Accidental damage cover protects against sudden, unintentional damage to your home or belongings. Examples include spilling wine on a carpet, drilling through a pipe, or a child breaking a window with a football. It is often an optional add-on rather than a standard inclusion. Check whether your policy includes it or whether you need to add it.
Does home insurance cover my belongings outside the home?
Many contents policies include personal possessions cover, which protects your belongings when you take them outside the home. This can cover items like laptops, phones, and jewellery while you are out. However, this is often an add-on, and there are usually per-item and overall limits. Always check the terms.
How do I calculate the rebuild cost of my home?
Use the free RICS/ABI rebuild cost calculator available on the ABI website. You can also check your mortgage valuation report, which should include a rebuild estimate. For non-standard properties, commission a full building survey for the most accurate figure.
Will making a claim increase my premium?
In most cases, yes. Making a claim typically increases your premium at the next renewal, even if the incident was not your fault. The increase varies by insurer and the nature of the claim. Minor claims on otherwise clean records have a smaller impact than large or multiple claims.
Can I change home insurance provider mid-policy?
Yes. You can cancel your home insurance at any time and switch to a different provider. Most insurers charge a cancellation fee, typically £25 to £50, and you may receive a pro-rata refund for the unused portion of your premium. Check your policy terms for the specific cancellation process.
What is Flood Re and how does it help?
Flood Re is a joint initiative between the UK government and the insurance industry. It allows insurers to pass the flood risk element of a home insurance policy to Flood Re at a fixed price, which makes flood cover affordable for homeowners in high-risk areas. Not all properties are eligible. Homes built after January 2009 and commercial properties are excluded. Visit floodre.co.uk for full details.
How We Created This Guide
This guide was written by Adam Taylor, Founder of MySupermarketCompare.com, and reviewed by the MySupermarketCompare Editorial Team.
Research methodology: The information in this guide is based on data published by the Association of British Insurers (ABI), guidance from the Financial Conduct Authority (FCA), the MoneyHelper home insurance guide, the ONS construction industry data, and a review of published policy terms across major UK home insurance providers.
Last reviewed: March 2026. This guide is updated when provider terms, regulations, or pricing trends change materially.
Disclaimer: This guide is for informational purposes only and does not constitute financial advice. Individual circumstances vary, and you should always read your policy documents carefully before purchasing. MySupermarketCompare is a trading style of TT Branding Ltd. Insurance quotes are provided through Seopa Ltd (Quotezone), authorised and regulated by the Financial Conduct Authority (FCA FRN 313860).