What Insurance Do I Need When Buying A House?

Buying a home is one of the biggest financial commitments you are likely to make, so protecting your property and your finances is an important part of the process. But with different types of insurance available, it can be difficult to know what cover you actually need.

Some insurance may be required by your mortgage lender, while other policies are optional but could provide valuable financial protection.

Do I need buildings insurance to buy a house?

If you are buying a house with a mortgage, your lender will normally require you to have buildings insurance in place. 

This covers the physical structure of your home against specified risks, which can include events such as fire, storms, flooding and escape of water, depending on the policy.

Buildings insurance is designed to cover the cost of repairing or rebuilding the property rather than the value of the land or your personal belongings.

Is home contents insurance necessary?

Contents insurance covers your personal possessions inside your home. This could include furniture, electrical items, clothing and other belongings against insured risks such as theft or accidental damage, depending on the policy.

Contents insurance is not usually a mortgage requirement, but it can be worth considering. Replacing everything you own following a major incident could be expensive, so having appropriate cover can provide valuable financial protection.

Buildings and contents insurance can sometimes be combined into a single home insurance policy.

Do I need life insurance for a mortgage?

Life insurance is not generally a legal requirement for taking out a mortgage, but it can be an important consideration, particularly if someone else relies on your income.

A life insurance policy can provide a lump sum if you die during the period covered by the policy. Depending on the level of cover, this could help your family repay some or all of the outstanding mortgage and maintain greater financial stability.

The right amount of cover will depend on your circumstances, mortgage and wider financial commitments.

Is critical illness cover worth having?

Critical illness cover can provide a lump sum if you are diagnosed with one of the specific serious illnesses covered by the policy and meet its conditions.

This could provide financial support if a serious illness affects your ability to work or maintain your usual income. The policy terms and illnesses covered vary, so it is important to understand exactly what a policy provides before taking it out.

Should you consider income protection?

Your ability to make mortgage payments depends largely on having a regular income. Income protection insurance can potentially provide a replacement income if you are unable to work because of illness or injury, subject to the policy’s terms and conditions.

For some homeowners, this can be an important part of protecting their mortgage and household finances.

How much insurance do you need?

There is no single insurance package that is right for every homeowner. Your needs can depend on your mortgage, income, family circumstances, property and existing protection.

A mortgage and protection advisor can discuss the different options with you and help you understand what types and levels of cover may be suitable for your circumstances.