Home insurance in the UK falls into two categories: buildings insurance and contents insurance cover. The first quote covers you in the event of any damage to the actual structure or fixtures and fittings of your property, whilst contents insurance cover, as you would expect from its name, insures the contents of your home against loss or damage. Both of these should include protection against fire and theft, as well as subsidence, flood and storm damage.
Tenants should only be responsible for their own possessions within rented accommodation, therefore should only need to take out contents insurance. It is the responsibility of the landlord to preserve and maintain the actual structural aspects of the building.
Most homeowners take out household insurance to cover themselves financially in the event of damage, theft or loss of a property and its contents. In addition to this it should also insure you, as the proprietor, against liability for damage to another property or injury to another person.
The exact way in which an insurance premium is calculated can be quite complicated and will be different for every insurer. Despite this, there are a number of factors that all companies use to put together a quotation.
The first thing an insurer will do is to look at where you live by checking your postcode. This will give them a clearer idea of the type of area you live in, and their premiums will be based on their experience and knowledge of that area.
This system is not without its faults. Insurers have no control over postcode allocation, and cannot separate out low-claim properties from so called 'high-risk' housing if the two are grouped together into the same postcode band. However not all companies use the same postcode rating system, so it is worth shopping around to find who will give you the best deal.
Other factors that are used to calculate a premium include:
The value of the item or items to be insured.
The level of insurance that is required.
The applicant's insurance history (this includes details of any claims that have previously been made, and may qualify the applicant for a 'no claims discount' if he or she has never made a claim before).