Start with the summary, not the price

When comparison sites line up five quotes and the cheapest is £40 a year lower, it is tempting to click "buy" and move on with your day. The trouble is that the difference in price almost always reflects a difference in what you are actually buying. UK insurers must give you a policy summary and an insurance product information document before you purchase, and those two short documents tell you far more about real value than the headline premium ever will. Ten minutes spent reading them can spare you a very unwelcome surprise at the worst possible moment.

Home insurance divides neatly into two halves: buildings and contents. You can buy them separately, together, or — if you rent — just the contents half. Knowing which is which, and what each one quietly leaves out, is the whole game.

Buildings insurance: the bricks and the bits you forget

Buildings cover looks after the structure of your home and the permanent fixtures inside it, including fitted kitchens and bathroom suites. A standard policy will typically pay to repair or rebuild after:

• fire, smoke and explosion
• storm, flood and escaping water from pipes, tanks and appliances
• subsidence, heave and landslip — sometimes included, sometimes an optional extra with a much larger excess
• theft or attempted theft, plus vandalism
• impact from vehicles, falling trees or branches
• damage caused by leaking oil or water from a neighbouring property

Cover usually extends to garages, outbuildings, garden walls, fences, paths and driveways, though often capped at a percentage of the main sum insured. Most policies include a sum for alternative accommodation if your home becomes uninhabitable, and cover for clearing the site after a total loss.

Two figures matter enormously. The first is the sum insured, which should reflect what it would cost to rebuild your home from scratch — not its market value. Build costs have risen steeply with materials and labour, so check yours annually rather than leaving it at the figure you set five years ago. Some policies are "bedroom-rated", meaning the sum insured is set by the number of bedrooms rather than a specific figure; handy for estimating, but worth checking you are not underinsured. The second is your excess, the amount you pay towards every claim. A voluntary excess of £250 will lower the premium, but you will need to find that money when the ceiling comes down.

Contents insurance: what is protected inside

Contents cover protects the things you would take with you if you moved house — furniture, carpets, curtains, electricals, clothes, kitchenware and personal belongings. Standard policies tend to include theft, fire and smoke, escape of water and oil, storm and flood damage, freezer food spoilage after a power cut, and small amounts of cover for money, cards and documents.

The limits are where people come unstuck. Most policies set a single article limit, often somewhere between £1,000 and £2,000, and a total limit for valuables such as jewellery, watches, art and antiques, frequently 20 to 25 per cent of the contents sum. Anything above those thresholds needs listing individually, which usually nudges the premium up but means the item is properly protected. Bicycles, laptops, phones and musical instruments often need "away from home" cover if you want protection outside the house.

If you rent, you only need contents cover — the building is your landlord's responsibility. If you let a room or run a business from home, tell your insurer, as standard policies routinely exclude business equipment and stock.

Accidental damage, legal cover and other add-ons

Accidental damage is the add-on people most often assume is already included. It usually is not. Standard policies cover accidents only in narrow circumstances — a football through a window, say — while a dedicated accidental damage extension covers the clumsier moments: red wine on the carpet, a laptop knocked off the table, a drill through a pipe. If you have young children, pets or a home office, it is often worth the extra few pounds a month.

Other add-ons worth understanding before you compare:

• Legal expenses cover — pays for legal costs in disputes over employment, contracts, personal injury or property, often up to £50,000 or more, and usually includes a telephone helpline.
• Home emergency cover — pays for a tradesperson to make safe or repair urgent problems such as a burst pipe or a failed boiler, typically with a call-out limit and a cap per claim.
• Personal possessions away from home — extends contents cover to items you carry with you, sometimes worldwide.
• Key cover — replaces locks and keys if yours are lost or stolen.

Exclusions and small print worth reading

Every policy excludes more than it covers, and that is normal. The ones that catch households out most often are:

• general wear and tear, and damage that builds gradually rather than happening in one event
• damp, condensation, vermin, insects and neglected maintenance
• homes left unoccupied for more than 30 or 60 consecutive days, unless you have told the insurer
• damage during building works you did not declare, or while a property is empty between tenancies
• the excess, remembering that many policies apply two — one compulsory, one voluntary

Check whether the policy replaces on a new for old basis or on an indemnity basis, which deducts wear and tear. Check whether you may choose your own repairer or must use the insurer's approved network. And check how a total loss would be settled: a cash sum based on an estimate may not stretch to the quote your builder actually gives you.

How to compare without getting lost

Before you start, write down five things: the rebuild cost of your home, the replacement value of your contents room by room, your most expensive single item, the excess you could comfortably afford, and any features you genuinely need — bicycle cover, flood protection, away-from-home possessions. Then compare like with like rather than cheapest with cheapest.

A low premium is good value only if the policy covers what you own and the things that could realistically happen to it. It is not a bargain if the limits are tight, the excess is steep and accidental damage is missing. Read the summary, ask the awkward questions, and keep a copy of your schedule somewhere dry — ideally somewhere you could still find it if the roof came off.