Buildings, contents or combined?
Buildings insurance covers the structure: walls, roof, floors, windows, and permanent fixtures such as fitted kitchens, bathrooms and (usually) outbuildings, fences and drives. Contents insurance covers what you’d take with you if you moved: furniture, clothes, electronics, jewellery and other belongings.
If you own a house you’ll normally want both, and a combined policy is often simpler (one excess structure, one claims line). If you rent, you only need contents; your landlord insures the building. Flat owners in the UK should check whether the freeholder or management company already insures the building through a block policy, which is common for leasehold flats.
How home insurance works in the US
US homeowners insurance is sold as standard policy forms that bundle dwelling, other structures, personal property, loss of use and personal liability cover:
| Form | Who it’s for | How it covers |
|---|---|---|
| HO-3 | Most homeowners | Dwelling on an “open perils” basis (everything not excluded); belongings on a named-perils basis |
| HO-5 | Newer or higher-value homes | Open perils for both the dwelling and belongings |
| HO-4 | Renters | Belongings, liability and loss of use |
| HO-6 | Condo owners | Interior walls, improvements and belongings; the condo association covers the shell |
| DP-3 | Landlords | Dwelling cover for a rented-out home (see landlord insurance) |
Flood is excluded from standard homeowners policies, and earthquake usually is too. Flood cover comes from the National Flood Insurance Program or private flood insurers (see flood insurance). In hurricane-prone states, wind damage can carry a separate percentage-based deductible.
How much cover do you need?
- Buildings (UK): insure the rebuild cost, which is what it would cost to clear the site and rebuild, including fees. It can be higher or lower than the market value. The figure is often in your mortgage valuation report, and the BCIS publishes a rebuild cost calculator for UK homes.
- Dwelling (US): insure the replacement cost of the home, not its sale price (which includes land). Ask whether the policy offers extended or guaranteed replacement cost if building costs jump after a disaster.
- Contents: add up what it would cost to replace everything new. People often underestimate this by forgetting clothes, kitchenware and garden items.
Under-insurance matters. Many policies apply an “average” clause: if you insure for less than the real value, the insurer can reduce a claim in proportion. Read our guide to under-insurance and the average clause.
Your rights when renewing (UK)
Since 1 January 2022, FCA rules stop UK home and motor insurers charging renewing customers more than they would charge an equivalent new customer through the same sales channel (the end of “price walking”). Shopping around can still save money, because a different insurer may price your risk differently. See how the renewal pricing rules work.
Fair ways to pay less
- Compare at every renewal, including direct insurers that aren’t on comparison sites.
- Pay annually if you can: paying monthly usually involves credit, which can add cost. See monthly vs annual payments.
- Choose a higher voluntary excess only if you could comfortably pay it.
- Improve security: approved locks and a monitored alarm can matter to some insurers.
- Don’t over-insure, but never cut sums below the real value to save money.
- Remove extras you don’t need, such as legal expenses you already have through another policy.
Last updated: 15 October 2026
