First Time Home Buyers Guide to Insurance

Mother and three children carrying big brown cardboard boxes out of the house smiling.

Congratulations on buying your first home! Being a first-time home buyer is an exciting time. After months, or maybe even years, of searching for your perfect home, you’ve finally found it. And even better, you’ve had your offer accepted. So, what now?

While it seems like you’ve already done all the hard work, unfortunately, there’s a lot more to come! There are so many things to consider at this early stage of your purchase, but insurance is definitely high on the list of things you’ll need to secure. Looking into what insurance you need can be a minefield. So this guide is specifically designed to help first time buyers understand what insurance they should buy, and when to buy it. 

Why do I need insurance?

Your house is most likely to be one of the most expensive investments you’ll ever make. But more important than that, it’s going to be the place where you make a home for you and your family. It’s going to be where happy memories are made, and the place that’s filled with all of your souvenirs, trinkets and favourite belongings. 

You should already have your mortgage in place at this stage, and your mortgage advisor will most likely have advised you that they won’t release your funds until you have proof of a Home Insurance policy. But taking out insurance should be looked at as more than just ticking off a requirement. Taking out insurance will give you peace of mind that your home and its contents are covered against any unexpected events that might occur whilst you live there. The right insurance policy is a great way to ensure that your nest is protected now and in the future. 

What type of insurance do I need?

If you’re still early on in the process of buying, having Home Buyers Protection Insurance is a great investment. Buying a home can be stressful, especially if it’s your first step onto the property ladder. There’s always a chance that a purchase can fall through for many reasons, such as the seller has changed their mind, or you have been gazumped at the last minute. Not only is this emotionally devastating, but it can be financially devastating too. Home Buyers Insurance can offer protection if this does happen, and can help you recoup some of the money that you’ve spent on conveyancing and solicitor fees.

When researching insurance quotes, you’ll notice that there are two types of Home Insurance; Contents Insurance, and Buildings Insurance. To secure your mortgage, you will only need to take out Buildings Insurance. However, it’s highly advisable that you take out both. As a general rule, if a giant were to pick up your house and shake it like a maraca, everything that fell out would fall under Contents Insurance. For example, your clothes, jewellery, and rugs. And everything that stayed put, such as the walls and the windows, would come under Buildings Insurance. 

If you’re lucky enough to be able to buy your new home outright without taking out a mortgage, then there is no legal requirement to secure insurance. However, it is still a valuable investment. It might be useful to list all the things in the house that could break, could fail, could flood, or could even be stolen; and think about the repair bill that could come your way in the event of an unexpected disaster. There is a handy calculator on this website that will help you to work out the cost to rebuild your home in the unfortunate event that something goes wrong. 

If you’re buying an apartment or a flat, then these are often Leasehold properties. You will need to secure Buildings Insurance for the parts of the building that you are responsible for. So, it may be worthwhile double-checking with the Leaseholder, and asking for a copy of the policy. 

Life Hack: Did you know that you can combine Buildings and Contents Insurance onto a Combined Home Insurance Policy. Meaning just one lot of paperwork, and only one renewal date to remember. It’s a no-brainer!

What should my Home Insurance Policy include?

No two homes are the same, so there is no one size fits all Insurance Policy. When looking for the right policy for you, price isn’t the only thing that you should consider. 

For Buildings Insurance, basic level cover can protect you against fire, floods, leaky pipes and theft. You can then tailor your policy to add on optional extras, such as; accidental damage - handy if you have an over-excited pup, or even more excitable children running around. You can also choose to add on Home emergency cover - so if a pipe bursts in the middle of the night, you can call an emergency line and get immediate help.

Getting the right Contents Cover can be a trickier endeavour. It’s really important to get an accurate estimation of the value of your contents. If you underestimate or overestimate the value of your belongings and need to make a claim, then it may be difficult to get the right payout. Whilst it seems like an impossible task, there’s no need to worry as help is at hand. There are plenty of contents calculators like this one on the internet, and they’re really easy to use. A useful thing to do is to go from room to room, and make a list of all your valuables. A handy tip is to take photographs whilst you do it, this makes it easier in the future if you ever need to make a claim. 

If you’re big into watch collecting, a keen cyclist, or have a passion for designer handbags, you’ll need to list these individually on your cover as high-value items. It may be useful to check with your insurer what the upper limit for high-value items is, as often it’s around £1500. So, if you have goods that are worth more than that, they may need to be listed on a separate policy to make sure that they’re fully protected.  

It’s also worth mentioning that if you work from home, as many people do post-COVID times, you might benefit from getting a policy that includes home working. This add-on can cover you for working from your home, and for loss or damage to the equipment that you use for the business. Another beneficial policy to consider getting if you do work from home, would be Public Liability Insurance

What other insurance do I need?

Building Insurance is the only type of insurance that is required by your mortgage lender, but there are plenty of additional policies that make sense now you’re a bona fide homeowner. 

Whilst it may not be something that you’ve thought about before, now you’re a homeowner with responsibilities, it’s a great time to think about the benefits of Life Insurance. It’s not a compulsory cover that you need, but in the unfortunate event that you or your partner pass away before your mortgage is paid off, a Life Insurance policy could pay off the outstanding balance. So, it can take away the worry and stress of leaving your loved ones with a debt that they might not be able to pay off alone.  

Another Insurance that you may not have considered is Mortgage Insurance.  This type of cover works by covering your mortgage payments if you’re no longer able to. If you’re too ill to work, or you pass away before paying your mortgage off, this policy can be used to clear mortgage debt. Which again, means that the stress of leaving a large debt to your partner or kids is gone.

Both of these policies could prove to be quite important in the future, so once you’ve secured your required buildings insurance, it’s definitely worth looking into quotes for the rest and safeguarding yours and your families' futures.  

Whilst Home Insurance seems like a headache, it’s actually quite straightforward, and plenty of help is available. Protect your new nest, your valuables and your future by taking out a home insurance policy. If you have any more questions, or want to get an insurance quote; please don’t hesitate to get in touch with one of our friendly, helpful advisors.

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