# Buildings and contents insurance, and Flood Re > Insurance · Last updated 6 April 2025 Canonical HTML: https://moneyguide.org.uk/insurance/buildings-and-contents-flood-re/ Markdown mirror: https://moneyguide.org.uk/insurance/buildings-and-contents-flood-re.md ## Quick answer Buildings insurance covers the structure of your home (and is mandatory if you have a mortgage). Buildings insurance covers the structure of your home (and is mandatory if you have a mortgage). Contents insurance covers what's inside. The Flood Re scheme, jointly funded by insurers and homeowners, makes flood cover available and affordable in around 5 million higher-risk homes through to at least 2039. ## Key facts - Buildings insurance: covers the structure (walls, roof, fitted kitchens/bathrooms) against fire, flood, storm, subsidence and similar perils. - Contents insurance: covers personal possessions inside the home. - Flood Re: reinsurance scheme for high flood-risk homes, in place until at least 2039. - Underinsurance can lead to a proportionate claim reduction — declare the rebuild cost (not market value) and total contents accurately. ## Buildings insurance: what it covers Standard buildings cover protects the structure of your home — outer walls, roof, floors, ceilings, fitted kitchens and bathrooms, permanent fixtures, garages and outbuildings — against perils like fire, lightning, escape of water, storm, flood, theft, vandalism and subsidence. Sum insured is the rebuild cost, not the market value. The Building Cost Information Service offers a free rebuild calculator at abi.bcis.co.uk. For unusual or listed buildings, get a surveyor's rebuild assessment. If you have a mortgage, the lender will require buildings cover as a condition of the loan. Leasehold flats normally have buildings insured by the freeholder; you only need contents. ## Contents insurance: what it covers Standard contents cover protects personal belongings inside your home — furniture, electronics, clothes, kitchenware — against fire, theft, flood, escape of water, etc. Optional add-ons include accidental damage (spills, breakages), personal possessions (cover for items taken outside the home — phones, jewellery, bicycles), pedal cycle cover, and home emergency. High-value single items (jewellery, watches, artwork, musical instruments) usually need to be specified individually above a single-item limit (typically £1,500–£2,500). ## How Flood Re works Flood Re is a not-for-profit scheme jointly owned by insurers and backed by a levy on every UK home insurance policy. Insurers can choose to pass the flood risk on home insurance policies to Flood Re at a capped premium based on council tax band, making cover available and affordable for around 350,000 high-risk homes. The scheme runs until at least 2039 and is gradually transitioning the market towards risk-reflective pricing while government and others invest in flood defences and resilience. Flood Re does not apply to homes built since 1 January 2009, commercial properties or large blocks of flats. ## Avoiding underinsurance and the 'average' clause If your sum insured is too low, most policies apply an 'average' clause to claims — meaning a claim is reduced in proportion to how underinsured you were. If you insure £15,000 of contents but really have £30,000, a £5,000 claim could be cut by half. Review your sum insured each renewal, especially after big purchases, home improvements or rising rebuild costs. ## Frequently asked questions ### Do I need accidental damage cover? It's optional and adds to the premium. It can be worth it for households with children or pets, or for high-value items, but it doesn't usually cover wear-and-tear or poor workmanship. ### Are my bicycles covered? Bikes are normally only covered inside the home as part of contents. Cover when away from the home usually needs personal possessions cover, often with a per-item limit and a security requirement (e.g. an approved lock). ### What is escape of water and is it covered? Escape of water means a leak from plumbing (e.g. a burst pipe). It is one of the most common buildings claims and is included in standard cover, though some policies have a separate excess for water damage. ## Primary source https://www.abi.org.uk/products-and-issues/topics-and-issues/flood-re/ ## Related - [Insurance guide](https://moneyguide.org.uk/insurance/) - [Income protection vs critical illness](https://moneyguide.org.uk/insurance/income-protection-vs-critical-illness/) --- Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.