Buildings and Contents Insurance When You Buy

This guide is for information only and does not constitute financial advice. Always speak to a qualified financial adviser before making financial decisions.

Buying your first home is a whirlwind of conveyancing forms, mortgage offers, and the occasional sleepless night. In the rush to pack boxes and sign deeds, home insurance for first-time buyers is often left until the very last minute. However, protecting your new asset isn't just about peace of mind; it is usually a non-negotiable requirement of your mortgage offer and a vital step in protecting your life’s biggest investment.

For most UK buyers, the moment you become legally responsible for a property happens earlier than you might think. Whether you are moving into a Victorian terrace, a modern apartment, or a new-build semi, understanding the nuances of buildings and contents insurance is essential to ensure you aren't left financially exposed if the unthinkable happens between exchange and completion.

This guide breaks down everything you need to know about securing the right cover at the right time, ensuring your journey into homeownership is as smooth and secure as possible.

The Essential Guide to Home Insurance for First-Time Buyers

When you browse insurance comparison sites, you will see three main options: buildings insurance, contents insurance, or a combined policy. Understanding the difference is the first step in ensuring you aren't paying for cover you don't need—or worse, leaving a gap in your protection.

Buildings Insurance

Buildings insurance covers the "bricks and mortar" of your property. This includes the structure itself (walls, roof, windows) and permanent fixtures like fitted kitchens, bathroom suites, and even some types of flooring. If your house were to burn down, be damaged by a storm, or suffer a major leak, buildings insurance pays for the repairs or the full rebuild.

Contents Insurance

Contents insurance covers the items inside the home—essentially everything that isn't nailed down. A common rule of thumb used by UK insurers is the "dolls' house test": if you were to turn your house upside down and shake it, everything that falls out is considered "contents." This includes your furniture, clothes, electronics, jewellery, and even the food in your freezer.

When to Get Buildings Insurance: The Exchange Trap

One of the most common mistakes first-time buyers make is assuming they only need insurance from the day they move in (Completion Day). In England and Wales, this is a dangerous assumption.

Legal responsibility for the property usually passes from the seller to the buyer at the exchange of contracts. From this moment, you are legally committed to buying the property. If the house were to burn down the day after exchange but before you moved in, you would still be legally required to complete the purchase at the full price. This is why having insurance for the exchange of contracts is so vital.

Exceptions to the Rule

There are two main scenarios where the "insurance at exchange" rule might differ:

• Scotland: The process is different under Scottish law. Responsibility usually passes at the "Date of Entry" (Completion), but you should always verify this with your solicitor as individual missives (contracts) can vary.
• Leasehold Properties (Flats): If you are buying a leasehold flat, the freeholder is usually responsible for insuring the building. You will likely pay for this through your service charge. However, you must confirm this and ensure the cover is adequate. You will still need your own contents insurance.

The Rebuild Cost vs. Market Value

When getting a quote for buildings insurance, the insurer will ask for the "rebuild cost." This is a figure that confuses many buyers. It is not the same as the price you are paying for the house.

The market value includes the value of the land and the desirability of the location. The rebuild cost is simply the price of the materials and labour required to build the exact same house again from scratch if it were destroyed. Usually, the rebuild cost is significantly lower than the market value, but in the case of listed buildings or properties built with specialist materials, it can occasionally be higher.

How to Choose the Right Policy

While price is a major factor, the cheapest policy isn't always the best. For first-time buyers, it’s important to look at the "excess" (the amount you pay towards a claim) and the specific exclusions.

Common Add-ons to Consider

1. Accidental Damage: Standard policies often don't cover you if you spill red wine on a new carpet or put a foot through the ceiling while in the loft. This add-on is often worth the extra few pounds a month.
2. Legal Expenses: Covers legal costs if you have a dispute with neighbours, contractors, or even employment issues.
3. Home Emergency Cover: Provides 24/7 assistance for urgent issues like a burst pipe, total boiler failure, or being locked out of your house.
4. Personal Possessions (Away from Home): This extends your contents insurance to cover items like your laptop, phone, or engagement ring when you are outside the house.

What Information Will You Need?

To get an accurate quote, have the following details ready:

• The year the property was built (approximate is usually okay).
• The type of roof (e.g., tile, slate, felt) and what percentage of it is flat.
• Details of the locks on external doors and windows (e.g., Five-lever mortice deadlocks).
• Distance to the nearest water source (river/sea) and history of flooding.
• Whether the property is in a good state of repair.
• The total replacement value of your contents.

Steps to Secure Your Insurance

Follow these steps to ensure you are fully protected by the time you pick up your keys.

1. Check your Mortgage Offer: Confirm if your lender has any specific requirements regarding the sum insured or the type of policy.
2. Estimate your Rebuild Cost: Use the building surveyor's report or a free online tool like the BCIS (Building Cost Information Service) calculator.
3. Calculate your Contents Value: Walk through your current home and tally up what it would cost to replace everything brand new. Don't forget the small things—clothes and kitchenware add up quickly!
4. Compare Quotes: Use at least two different comparison sites and check direct-only insurers who don't appear on comparison sites.
5. Align with Exchange: Once your solicitor gives you a firm date for the exchange of contracts, set the policy to start on that morning.
6. Provide Proof: Send the policy schedule to your solicitor so they can satisfy the mortgage lender’s requirements.

Costs to Expect in 2025/2026

The cost of home insurance has risen in recent years due to the increased cost of building materials and labour. As of 2025, the average combined buildings and contents insurance policy in the UK typically ranges between £160 and £300 per year, though this varies wildly based on location, property type, and your personal claims history.

First-time buyers can often keep costs down by:

• Opting for a higher voluntary excess (ensure you can afford to pay it if you claim).
• Installing approved security locks and smoke alarms.
• Paying the annual premium in one go rather than monthly (which often carries interest).
• Ensuring they don't over-estimate the rebuild cost.

Key Takeaways

• Exchange is the key: In England and Wales, you must have buildings insurance in place from the moment you exchange contracts.
• Mortgage Necessity: Most lenders will refuse to release funds if you cannot prove the building is insured.
• Rebuild vs. Market Value: Only insure the building for the cost of rebuilding it, not the price you paid for the property.
• Combine for Savings: Buying buildings and contents insurance from the same provider is usually cheaper and easier to manage.
• Review Exclusions: Always check what isn't covered, such as general wear and tear or damage caused by pets, before signing.