Home Insurance for First-Time Buyers: What It Covers and Costs (UK 2025 Guide)

Why First-Time Buyers Need to Understand Home Insurance

Buying your first home in the UK is a major milestone—but it also comes with new responsibilities. One of the most important? Protecting your new property with the right home insurance .

Whether you're buying a flat or a freehold house insurance can:

• Safeguard you from thousands in repair costs

• Protect your possessions from theft or fire

• Satisfy lender requirements for your mortgage

This guide explains:

• What home insurance actually covers

• The difference between buildings and contents insurance

• How much it typically costs

• What lenders expect before completion

• The best tips to find reliable affordable cover

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What Is Home Insurance in the UK?

Home insurance refers to financial cover that protects your property and/or belongings from unexpected damage or loss.

It’s typically split into two categories:

1. Buildings Insurance

Covers the physical structure of your property including:

• Roof walls floors

• Windows and doors

• Fitted kitchens and bathrooms

• Garages sheds and outbuildings (if included in the policy)

Keyword: what does building insurance cover UK

Lenders usually require buildings insurance as a condition of the mortgage —you must have it in place by exchange or completion .

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2. Contents Insurance

Covers the items inside your home such as:

• Furniture

• Electronics

• Clothing

• Jewellery

• Kitchen appliances (if not fitted)

Contents cover is optional but highly recommended —especially for first-time buyers who are furnishing from scratch.

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What Does Building Insurance Typically Cover?

A good UK building insurance policy will protect against:

Note: Subsidence may require a specialist policy or be excluded in high-risk areas.

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What’s Not Covered by Basic Home Insurance?

Home insurance doesn’t typically cover:

• Wear and tear

• Damage due to poor maintenance

• Pest infestations

• Leaving your home unoccupied for 30+ days without notice

• Using your home for business purposes (without declaring it)

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How Much Does Home Insurance Cost in the UK (2025)?

Buildings Insurance:

£130 – £250/year (average for a 3-bedroom home)
Premiums vary by:

• Property value

• Location (flood risk crime rates)

• Type of construction (standard vs non-standard)

• Security measures (alarms locks)

Contents Insurance:

£60 – £120/year
Premiums are based on:

• Total value of contents (e.g. £30 000 cover)

• Whether you want new-for-old replacement

• Add-ons like accidental damage or personal possessions away from home

Bundle policies (buildings + contents) often offer discounts of 10–20%.

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Do You Need Insurance Before Completion?

Yes— buildings insurance is required by your mortgage lender from the date of exchange of contracts .

Here’s why:

• You’re now legally responsible for the property even before you move in.

• Your solicitor will ask for the insurance certificate before completing.

If you're buying a leasehold flat the freeholder often insures the building—but always double-check what's covered.

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Top Tips for First-Time Buyers

1. Get quotes early—before exchange
   Don’t leave it until the last minute. Compare providers and be ready with documentation.

2. Know your rebuild cost—not just market value
   Insurers often ask for the estimated rebuild cost which can be found on your RICS valuation or mortgage survey.

3. Consider extras wisely
   Add accidental damage cover or legal protection if you want peace of mind—but avoid over-insuring.

4. Use a comparison site
   Check quotes from GoCompare CompareTheMarket or MoneySuperMarket to find competitive deals.

5. Read the fine print
   Pay attention to exclusions especially for flood zones subsidence areas or non-standard construction materials.

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What If You’re Buying with Help to Buy or Shared Ownership?

Many first-time buyers use schemes like Shared Ownership or Help to Buy .

You’ll still need:

• Buildings insurance (if you're buying a share of a house)

• Or contents insurance (if in a leasehold flat with managed block insurance)

Always ask your housing association or conveyancer for clarification.

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Can I Transfer Cover When I Move?

Yes—if you’re currently renting and have contents insurance some providers will let you update your address and convert to a homeowners policy.

But if you’re starting fresh it’s usually easier (and cleaner) to take out a new policy on your new home .

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Summary: What First-Time Buyers Need to Know

Final Word: Be Insured, Be Ready

Buying a home is exciting—but protecting it is essential.

If you’re a first-time buyer in the UK:
Get quotes early
Understand your rebuild value
Choose the right policy for your home type
Don’t forget to activate it by exchange

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