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Home insurance for first-time buyers

If you're taking out a mortgage, you'll need to consider home insurance. Find out about home insurance for first-time buyers and how to get quotes

goco author
Amy Smith
Updated 12 August 2021  | 3 min read

What’s first-time buyer home insurance?

First-time buyer home insurance is just buildings and contents cover if you’re buying your first home.

You can buy buildings and contents insurance separately or together as a single policy.

Home insurance compensates you if something unexpected happen, like a theft, fire or flood, so that you can replace your belongings or repair your home.

  • If you’re a first-time buyer and are taking out a mortgage, the lender will require you to take out buildings insurance
  • You should have buildings insurance in place by the time you exchange contracts
  • Taking out contents insurance early can also cover your possessions when you’re moving in, in case they get broken or lost during the removal process

Do homeowners need home insurance?

Whether your first home is a house or flat, when you buy a property you’ll need to consider home insurance.

If you’re taking out a mortgage to buy a house, your mortgage lender will require you to buy buildings insurance - they’ll want to know their investment is protected until you’ve paid off the loan.

If you're buying a flat or other leasehold property, buildings insurance is often the responsibility of the landowner or freeholder, but your lender will still want evidence that the property's insured. Your conveyancer should take care of this for you.

Even if you don’t need a mortgage to buy your home, it’s still a good idea to take out buildings insurance. You’ll need to think about how you’d pay for repairs, or even a rebuild, if your home was damaged by an unforeseen event - for example, a flood, fire or storm.

Whether you insure the contents of your home is up to you. But again, think about how you’d pay to replace your belongings if you had to - their total cost can be more than you realise.

What does home insurance cover?

The two main types of home insurance cover two different aspects of your home - the structure of your home and the possessions inside it.

Buildings insurance

Buildings insurance covers the structure of your new home, including the walls, roof and floors, against any unexpected damage that might need to be repaired.

Your permanent fixtures and fittings will also be insured - for example, doors and windows, fitted kitchens and bathroom suites.

Essentially, this type of home insurance covers anything that’s fixed down.

Most policies will also pay the cost of emergency temporary accommodation if you can’t live in your home because of the damage that’s been caused.

Contents insurance

Contents insurance covers the cost of repairing or replacing the contents inside your home if they were to get damaged, destroyed or stolen.

Your policy will cover possessions and valuables like electricals, appliances, clothing and furniture. Basically, anything you might take with you when you move home.

Individual items will only be covered up to a certain amount. This is called a ‘single item limit’ - for most insurers this limit is £1,000.

Items worth more than this will need to be listed separately on your policy if you want cover for their full value.

Home insurance will usually cover:

  • Fire damage
  • Storm and flooding damage
  • Subsidence
  • Falling trees
  • Burst pipes
  • Theft and burglaries

When should first-time buyers get home insurance?

You should make sure your building insurance policy has started by the time you exchange contracts with the seller - this is when you’re legally obliged to buy the property.

If you don’t have buildings insurance by this time, you could risk your mortgage falling through. This might collapse the chain and could mean you losing the chance to buy this new house altogether.

It’s also a good idea to buy contents insurance before you move into your first home. If your belongings are damaged or lost while you’re moving in, most insurers will cover you for this if you’re using a professional removals company.

Do I have to buy insurance through my mortgage provider?

Although you need to have buildings insurance to get your mortgage, you don't have to buy it from your mortgage provider.

In fact, although some lenders will offer buildings insurance as part of their mortgage package, you may get a better deal elsewhere.

You can buy your home insurance with any insurance provider and can even buy contents and buildings cover from separate insurance companies. But sometimes you can get a better deal if you buy both types of insurance together from the same provider.

As always with insurance, it’s best to compare policies and providers - and take a close look at any exclusions - to make sure you get the right cover.

How much should I insure my new property for?

When you’re looking to insure your first home, and any other home you buy after that, the amount of cover you’ll need will depend on how much it would cost to rebuild your property from scratch. This is not the same as how much you paid for your home.

You should be able to find your home’s rebuild cost on your mortgage valuation report or your surveyor’s report. You can also use the free rebuilding cost calculator from the Association of British Insurers.

Being insured for the right rebuild amount on your buildings insurance policy can save you from having to pay for a shortfall if damage meant your home had to be rebuilt.

How much is home insurance for first-time buyers?

As a first-time buyer you won’t have to pay more for home insurance than other people. Your quotes will depend on how likely the insurer thinks it is that you’ll make a claim, the value of your building and the level of cover you choose.

The cost of home insurance will also depend on where you live and what the crime rate is, along with factors like the risk of flooding and subsidence.

The average price paid by GoCompare customers for a combined home insurance policy is just under £180 a year.[1]

What other insurance do I need if I'm buying a house?

As a new homeowner there are some other types of insurance and add-ons you may want to consider:

  • Accidental damage - This can be a policy add-on and covers you for unexpected damage in the home like a smashed window or spilled paint on the carpet. You can also get accidental damage cover for your building.
  • Personal possessions insurance - Standard contents insurance only covers your belongings when they’re in your house. This type of cover protects your possessions against being lost, stolen or damaged when you take them away from the home.
  • Legal expenses cover - This type of insurance is a standard feature with many home insurance policies or can be an optional extra. It can help with legal expenses - for example, personal injury claims and boundary disputes with neighbours.
  • Home emergency cover While home insurance covers you for damage caused by unexpected events, this cover can help with urgent issues around gas, electricity and water, covering the cost of call-out fees and emergency repairs related to these services.

Do you need building insurance on a new build?

Although most new build homes come with a warranty, mortgage lenders will still require you to take out buildings insurance.

A new home warranty won’t cover you for everything, so it’s still a good idea to take out buildings insurance.

Sometimes, new build properties are on a new postcode that isn’t on some insurers’ systems which can make it difficult to buy home insurance. If this happens you’ll need to speak to the builder or developer to make sure your postcode is registered.

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[1]The average price paid for home insurance annually through GoCompare in March 2021.

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