For new home owners home insurance is a necessary purchase, there are two types of home insurance they are buildings cover and contents cover.

Buildings cover pays for damage to your property that is caused by fire, flooding or subsidence. Contents cover pays for damage or theft of the possessions in your home, such as electronic items, jewellery and garden furniture.

As you muddle your way through the mortgage process you will be asked to arrange building insurance, you will not be able to finalise your mortgage until this insurance has been purchased.

Many mortgage lenders will offer to provide you this cover, but the cost of simply agreeing could cost you a packet. Looking around can provide you with better protection and save you a few pounds.

One thing to look out for is some mortgage providers have a section on the application form asking you to tick a box if you wish to take out buildings insurance with them, this could end up being a nightmare. As a recent report revealed, the report said that those who ticked the box were not always told how much their insurance would cost and the amount was taken from their bank account without notice.

This lead to a number of issues for customers such as being overdrawn, facing bank charges or without realising they had taken insurance out with their mortgage provider taking out another policy with a different insurer.  You can already see the headache this can cause, so make sure you read all paperwork thoroughly.

Building insurance not only provides covers for structural problems with the property but can also covers permanent fixtures and fittings such as baths and fitted kitchens, garages, sheds, fences, paths and some polices cover swimming pools.

The policy you take out will depend on the property you are purchasing and what you want to cover, many insurers have add on options which can cover windows or damage caused by DIY.

Each insurer will advise you of the sum insured, this is the amount of money your home is covered by and is the most amount the insurer will pay out. Bare in mind this is the amount you would receive if you had to rebuild your home due to a fire or any other reason, this may be less than your home is worth. If this is a concern to you than hunt around for an insurer who offers unlimited cover, this way anything that happens will be fully covered.

Most building insurers offer customers the option to pay premiums monthly or annually. However if you do choose to pay monthly some will charge you a fee and this can be anything from £5.00 to £30.00.

Before signing such an important insurance document check for exclusions, some common areas that are not usually covered include storm damage to gates and fences, frost damage and damage to properties caused by airplanes.

It is also worth checking if there is an excess fee, the level of excess can vary greatly but in cases of subsidence can be anything up to £1500.00.

Although considering all these factors can seem tedious it will mean you can enjoy your new home fully with the piece of mind if something unfortunate does happen you have adequate cover.