Home insurance works similarly to car insurance. You incur a loss, and the insurance provider covers the bill.
A contents insurance policy covers your personal possessions inside your home. For instance, if burglars steal your jewellery, your policy will payout.
Buildings insurance covers the cost of damage to the building. Typically, this includes extreme weather and accidental damage cover. It could also cover mortgage payments.
Companies also offer tiers of home insurance. Basic cover protects your contents up to a certain value and against fire. Non-standard add-on cover might protect against flooding, subsidence, holiday home and electric damage, and pet or tradesperson damage. It could also provide alternative accommodation, fire brigade charges cover, or credit cards cover. Add-ons also exist that cover the cost of a tradesmen call-out.
You can bundle home insurance into other products too. Doing this can sometimes yield big discounts.
When you make a claim, you may have to pay a voluntary excess. This is in addition to your compulsory excess. You will only get funds once you pay this fee.