Home sweet home; there are few things more valuable in life than our own personal space or the home we make for our families. Our place to live is often the most valuable commodity in our lives and the contents within are frequently not just expensive, but of great personal value.

People have been insuring their homes for almost 300 years. The first household insurance policy was issued by the Sun Insurance Office in 1710, during the reign of Queen Anne.

Not surprisingly it was pretty basic and simply covered fire and fire damage. But since Sun Insurance's pioneering move, household insurance has changed beyond recognition. Today, policies are offered by financial companies such as banks, building societies and insurance companies.

As a homeowner, you need two types of home insurance to enjoy peace of mind. Contents cover protects you household possessions, and building cover pays for damage to your home caused, for example, by firs or subsidence. These two types of cover may be bought separately, but it is often more convenient - and usually most cost-effective to buy them under one policy.

Choosing the most appropriate deal from the wide range on offer can be a nightmare. Though many companies have added extras of all kinds to their policies, the number of conditions, caveats and exclusions has also expanded, creating what could be an expensive pitfall for the unwary.

Why is home insurance necessary?

It's easy to think that bad things happen to other people and not ourselves, but the facts suggest that isn't a risk we can afford to take. In the UK, one in three of us will get burgled at some point in our lives yet about a quarter of households are not protected by any form of home insurance.

With other unfortunate occurrences such as flood/storm damage, fire and more, threatening our homes and their contents, by not having insurance we are leaving ourselves open to serious financial loss.

Home insurance can now offer something for everyone with insurance for homeowners, tenants and landlords. Increasingly, mortgage lenders will insist that you have buildings insurance to obtain a mortgage.

Insurers will need a lot of information including the construction date and materials for the building, and different insurers might not insure unusual properties such as prefabricated buildings and thatched cottages. Insurers also need to know about the local lie of the land to assess the flood-risk.

So what now?

The home insurance market is fiercely competitive and that is great news for anyone looking for insurance or in search of a better deal.

Home Insurance may be bought from a number of sources, but you should shop around if you want best value for money. An independent financial intermediary will scour the market on your behalf for the best home insurance deal.

Home insurance may be bought direct from insurance companies, usually over the telephone. You can save money buying this way because the insurance company does not pay commission to an agent such as a bank or building society for arranging the sale.

Do not confuse home insurance comparison sites with company agents who can recommend the insurance policies of only a limited number of companies.

But the complex and confusing exclusions and excesses can make it difficult to buy the right policy. Take your time when buying home insurance, do not except the first packaged offered to you, and ask questions if you don't understand any part of the policy. That way, you will obtain value-for-money home insurance.

Finally, read the policy details thoroughly to make sure there are no hidden huge excesses and lists of exclusions.

Here, on our website, you will find accurate information on over 300 credit cards, plus loans, home insurance and mortgage deals for efficient personal finance management.