Whether you’re crazy about insurance or not, it’s a fact of life and when you think about it protecting your home and its contents against theft, damage, flooding, subsidence and other misadventures is sensible; remember, not doing so could completely ruin you. Imagine taking out a loan on a house only to see it slide into a river a few weeks later and not having it insured. You’d be up to the hilt in debt to the lender and probably facing financial ruin. This is why house insurance and more importantly buildings insurance, at least, is a prerequisite of taking out a mortgage, as many might otherwise be tempted to skip it and both lender and homeowner would lose out spectacularly. The only exception to taking out buildings insurance with a mortgage would be if you were a leaseholder whose landlord had already taken care of it, say for a block of flats.
Although you are not required to take out contents insurance, the lender couldn’t care less about your personal effects, so it would be unwise not to have cover in place. Thieves don’t leave a calling card and it would probably be the last you ever saw of that family heirloom or HDTV, Xbox or top-of-the-range home-theatre equipment. A ‘new-for-old’ contents policy will at least replace the gadgetry with the latest models, although the heirloom will probably, if you’re sensible, have been separately insured. This is normally the case with individual items above £1,000 or so.
Check the policy carefully before taking it out, to see what exactly is covered.