First-Time Buyer Insurance: A Handy Guide
You’ve saved for years, found that perfect property and are preparing to become a homeowner for the first time. But, it’s not quite as simple as that! Buying a home can be confusing to say the least. There’s so much to think about, many things can get forgotten. It’s time to make sense of it all! Here’s a closer look at first-time buyer insurance.
What does home insurance do?
If you haven’t owned a home before, many things can feel like alien territory. So, it’s no wonder first-time home buyers need advice to help them through the property minefield.
Home insurance is a confusing topic, but it’s one of the most important steps on the first-time buyer checklist. There are two types, and many are unclear about what these cover.
So, let’s break it down:
Contents insurance
For a first-time buyer, contents insurance might be familiar, as its often bought by those who rent. However, many people leave buying it until after they can confidently call themselves homeowners.
Contents insurance covers anything you’d be able to pack-up and take with you to your next home. This includes:
• Any sentimental items
• Furniture
• Miscellaneous belongings e.g. clothes
Just think – this type of insurance covers anything not attached to the building itself. It’s usually called upon in cases of theft, which is why keeping your home secure can lower its price. However, it also covers damage, such as floods.
Tip: taking pictures of your belongings makes it easier if you need to make a claim!
In some cases, this type of insurance can cover items away from your home, such as laptops.
Some homeowners brush aside contents insurance. But, for many, it’s worth the peace of mind.
Buildings insurance
Buildings insurance looks after the structure of your property. This includes:
• Windows
• Walls
• Doors
• Roof
To put it more simply – it’s anything that can’t be taken away from the property itself.
Buildings insurance is usually claimed for if your property is damaged, for example by a fire or storm.
If you’ve only ever rented your home, you won’t have come across this type of insurance before! But, now, it will be essential. Most first-time buyers need a mortgage to buy a home, and having buildings insurance will likely be a condition of your lender.
First-time home buyer insurance – the exceptions
It’s important to be aware that your insurance policy won’t cover you for everything. Even if the problem is buildings or contents related, there are exceptions.
It’s vital you’re aware of these. While every policy is different, there are some common offenders.
So, when might you not be covered?
Wear and tear
Gradual damage isn’t usually covered by your insurance. This could include:
• The property foundation slowly becoming unstable – also known as subsidence.
• Damp
• Corrosion
• Rusting
• Damage from pests, such as vermin
While this may seem unfair, it’s important to be aware of what your insurance does and doesn’t cover. You don’t want a nasty surprise later on down the line!
Accidental damage
Accidents happen… But which ones will you be covered for?
It’s important to thoroughly check your insurance policy. You might believe you’re covered for accidental damage when you’re not.
In usual circumstances, accidental damage cover is sold as an optional add-on – not part of standard buildings insurance.
This covers one-off events such as:
• A breakage – if you dropped a laptop/ smashed a window
• Accidents caused by children
Always read the small print with this one. ‘Wear and tear’ in some policies may not count as accidental damage, even if it’s not your fault. Rules are different depending on each policy, so it’s important to be aware.
First-time buyers are particularly prone to getting caught out with this one, as buildings insurance is still unfamiliar territory!
Damage caused by pets
In Britain we love our pets, there’s no denying that!
Unfortunately, not all insurance providers love them quite as much. So, certain policies may exclude the cover of any animal-related accidents.
So, if your dog tears up your new carpet or chews through any furnishings – the only answer is better training! Infestations caused by your beloved pets may also not be covered either.
Carelessness
Unsurprisingly, some responsibility sits with the homeowner.
Negligence is one of the main reasons for homeowners having claims refused! For example, if you forget to lock your doors or set your alarm, your belongings are unlikely to be covered by your policy.
Flooding
In many cases, floods are covered under your buildings insurance. It’s important to be aware that if a flood causes damage and you don’t have contents insurance – belongings may not be covered! Only structural damage to your home will.
However, if you live in a high flood-risk zone, you might have to buy separate insurance to cover this. Therefore, it’s always worth checking your policy! Don’t wait until after a flood happens to find out.
No house is immune to flooding, so it’s always worth checking if you’re at risk.
There are ways to reduce risk of flood damage, such as:
• Signing up for flood warnings
• Installing flood boards or air-brick covers
• Checking flood maps
Japanese knotweed
Japanese knotweed is a nuisance plant that can cause structural damage to your property. It exploits any weaknesses in the building, breaking pipes, drains and floors.
Some more bad news? Under general insurance policies, this damage isn’t covered!
You also won’t be covered if knotweed found in neighbouring properties causes damage to yours.
Botched home improvements
Most insurance companies won’t take kindly to DIY gone wrong.
If you decide you don’t need a professional to fix the plumbing or knock down any walls, do so with caution. Should you break anything or cause any long-term damage to your property, you may not be covered.
How much does first-time home buyer insurance cost?
Insurance is another expense that goes hand in hand with buying a house! But, it’s a necessary one.
Every policy is different, so costs will depend entirely on where you’re located, and your property needs. But there are some general rules.
Usually, the cost of buildings insurance depends on how much it would cost to rebuild your property completely. Remember, this is not the same as the sale price of your home!
With contents insurance, the price of this will largely depend on your local area. Therefore, it’s always worth checking the crime rate of your area to gauge how risky your location is perceived by insurers and therefore how much your insurance is likely to be. You may be asked to implement certain safety measures to deter break ins.
First-time buyers: how to pay less for your home insurance
Let’s face it, who doesn’t love to save money?
There are ways to keep costs down!
Unconvinced? Here are some top tips:
Stay safe
Want to pay less for your insurance? The answer is simple – increase your security.
Need some tips on the best way to do this?
• When you first move in, change the locks
• Lock all windows and doors
• Keep keys safe
• Don’t leave valuables near windows
• Install security cameras
• Install exterior lights
• Install a burglar alarm, use it and maintain it
Compare quotes
Never immediately go with the first quote you see!
Always shop around to see who’s offering the best price.
First-time buyers are likely to be hit with many attractive offers, as insurers always want new customers. So, it’s important you compare!
Only buy the extras you need
It can be easy to convince yourself you’ll need all the extras presented to you.
But, make sure you only buy the ones you need! Don’t feel obliged, or forced, to spend more than you have to.
Buy buildings and contents insurance together
Pair up!
In many cases, insurers will offer good discounts for customers who buy their contents and buildings insurance together.
Plus, if nothing else, it will make life a lot easier should you need to make a claim!
Pay upfront
Paying for your policy upfront isn’t an option for everyone.
However, this can be cheaper than paying in instalments! This is because, with monthly instalments, you end up paying a form of ‘interest’ from borrowing the money.
Don’t make unnecessary claims
The less claims you make, the more likely your premium is to go down over time.
Obviously, if you need to, make a claim – such as a burglary – this isn’t avoidable. But, for smaller issues, such as accidentally broken items, it might be worth paying to fix these yourself. Think of this as similar to the ‘no claims’ policy on car insurance.
When should first-time buyers get insurance?
Buildings insurance should be in place at the point of exchanging contracts with the seller. Most mortgage lenders will insist on this.
Don’t wait until you have the keys, the early bird catches the worm.
If you’ve decided to buy contents insurance, get this before moving day. Even if you go with the best removals firm out there, your belongings might still be damaged in transit!
Remember – to be covered, you’ll need to use a professional company. Alternatively, you could buy the travel insurance provided by the removals firm themselves.
Best home insurance for first-time buyers – what does it look like?
There’s no one answer for what the best insurance policy looks like. This is entirely down to individual circumstances.
But, it’s important to not just look at price. You need to work out what works for you and your new home.
Your insurer will look at how likely you are to make a claim. For example, if you live in a high-risk flood area, insurance will be costlier.
Every property is different. Therefore, all home insurance policies are different. Are you buying the right one to cover your needs?
First-time buyer insurance isn’t all you need to think about when buying a property! It’s also essential you research your new area to make sure you’re happy with your property decision. You’ll also want information on everything from schools to crime rates. A property report can tell you all of this and more!
Last Updated: November 1st, 2024
