Home insurance is divided into two categories: buildings insurance and contents insurance. It is important to have a solid understanding of both in order to obtain the home insurance coverage right for you.

Buildings insurance covers only the actual structure of your home or outbuildings. This also includes fixtures and fittings, such as the basin, bathtub, or closets. When considering the amount of buildings insurance coverage you will need, assess only what it would cost to build your home from scratch and not the actual land on which it is situated. You may find it helpful to hire a surveyor to assess the value of your home. Overvaluing your home will only increase your premiums, and undervaluing your home may leave you with a financial loss.

Contents insurance covers only those possessions in your home that you would take with you if you were to move. When deciding how much contents insurance coverage you should have, be certain to take into account not only your larger or more expensive valuables, but also other items that may be of lesser value but still important, such as clothes, CDs, and books.

When gathering home insurance quotes, it is a good idea to see whether an insurance company offers a discount if you purchase both buildings and contents insurance with them together. Often this is the case, and this will help you to reduce the cost of your home insurance premiums.