Buildings and contents insurance, and Flood Re
Quick answer: Buildings insurance covers the structure of your home (and is mandatory if you have a mortgage).
Buildings insurance covers the structure of your home (and is mandatory if you have a mortgage). Contents insurance covers what's inside. The Flood Re scheme, jointly funded by insurers and homeowners, makes flood cover available and affordable in around 5 million higher-risk homes through to at least 2039.
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Primary source: https://www.abi.org.uk/products-and-issues/topics-and-issues/flood-re/
Buildings insurance: what it covers
Standard buildings cover protects the structure of your home — outer walls, roof, floors, ceilings, fitted kitchens and bathrooms, permanent fixtures, garages and outbuildings — against perils like fire, lightning, escape of water, storm, flood, theft, vandalism and subsidence.
Sum insured is the rebuild cost, not the market value. The Building Cost Information Service offers a free rebuild calculator at abi.bcis.co.uk. For unusual or listed buildings, get a surveyor's rebuild assessment.
If you have a mortgage, the lender will require buildings cover as a condition of the loan. Leasehold flats normally have buildings insured by the freeholder; you only need contents.
Contents insurance: what it covers
Standard contents cover protects personal belongings inside your home — furniture, electronics, clothes, kitchenware — against fire, theft, flood, escape of water, etc.
Optional add-ons include accidental damage (spills, breakages), personal possessions (cover for items taken outside the home — phones, jewellery, bicycles), pedal cycle cover, and home emergency.
High-value single items (jewellery, watches, artwork, musical instruments) usually need to be specified individually above a single-item limit (typically £1,500–£2,500).
How Flood Re works
Flood Re is a not-for-profit scheme jointly owned by insurers and backed by a levy on every UK home insurance policy. Insurers can choose to pass the flood risk on home insurance policies to Flood Re at a capped premium based on council tax band, making cover available and affordable for around 350,000 high-risk homes.
The scheme runs until at least 2039 and is gradually transitioning the market towards risk-reflective pricing while government and others invest in flood defences and resilience.
Flood Re does not apply to homes built since 1 January 2009, commercial properties or large blocks of flats.
Avoiding underinsurance and the 'average' clause
If your sum insured is too low, most policies apply an 'average' clause to claims — meaning a claim is reduced in proportion to how underinsured you were. If you insure £15,000 of contents but really have £30,000, a £5,000 claim could be cut by half.
Review your sum insured each renewal, especially after big purchases, home improvements or rising rebuild costs.
Common questions
- Do I need accidental damage cover?
- It's optional and adds to the premium. It can be worth it for households with children or pets, or for high-value items, but it doesn't usually cover wear-and-tear or poor workmanship.
- Are my bicycles covered?
- Bikes are normally only covered inside the home as part of contents. Cover when away from the home usually needs personal possessions cover, often with a per-item limit and a security requirement (e.g. an approved lock).
- What is escape of water and is it covered?
- Escape of water means a leak from plumbing (e.g. a burst pipe). It is one of the most common buildings claims and is included in standard cover, though some policies have a separate excess for water damage.