Whether you own the property you live in or rent it from someone else, there's likely to be a hundred things on your plate already. Five different utility bills, rent or mortgage payments, maintenance and cleaning; it all takes up precious time and money.
You'd be forgiven, then, for groaning every time someone suggests getting home insurance. It probably just seems like another unnecessary outgoing you could do without. Do you really need it? Let's take a look.
What is home insurance?
This may seem like too obvious a question to start with, but understanding home insurance is often the hurdle at which homeowners and tenants fall. It doesn't help that there are three very similar terms that each mean something slightly different.
Buildings insurance is for a property's permanent fixtures, such as bathrooms, kitchens and the walls that connect them.
Contents insurance covers the things you keep in your home, like furniture, technology and other personal belongings.
Both of these are types of home insurance, and you can buy them either together or individually. Sometimes it's cheaper to buy them in one package.
Homeowners
If you're a homeowner, you'll find that most mortgage lenders insist you have buildings cover in place. This way, their investment is protected in the event of a serious incident. If an act of nature causes irreparable damage, or there's a fire and you're not able to cover the costs, the lender doesn't lose out.
Mortgage lenders aren't likely to care quite so much about your possessions – as it doesn't affect them if anything gets destroyed. This leaves you to make a decision about whether to get contents insurance or not. We'd still advise it (more on that later), but you can choose.
Renters
Some (but not all) letting agents and landlords insist in their contracts that tenants have contents insurance, so you may not have a choice. If they do require it and you decide not to arrange cover, you'll be in breach of contract, which could cost you a lot more in the long run.
It's particularly likely to be mandatory if the property you're renting is furnished to some level; once again, this is just the owner protecting their own investment – if they've provided a pricey set of sofas and white goods, they'll want to know they're covered should something happen to them.
You'll be happy to know that as a renter, the buildings cover should be covered by your landlord – usually as per the terms of their mortgage agreement. Always be sure to double check, though.
If the choice is yours…
If you find yourself able to choose whether or not you invest in contents insurance, don't just write it off as unnecessary expenditure. People often assume they'll never need it – that their security systems will stop anyone breaking in, or that they're in a low-risk flood area. In truth, the consequences if something does go wrong are significant enough to make it worthwhile, even if the risk is particularly low.
Imagine losing all of your possessions to a fire caused by faulty electronic items, or someone breaking in when you're on holiday. These things happen without any warning, and they're devastating enough as they are without you being forced to start over from scratch afterwards. If there's anything that can give you a little peace of mind when something horrible happens, it's knowing your insurance company will be there with the financial help you need!
So, even if insurance isn't mandatory in your situation, it's still well worth seriously considering.