Despite the potential implications of a break-in or natural disaster, a worrying number of Britons are still neglecting to take out home insurance.

According to the British Insurance Brokers' Association (Biba, home insurance is the second-most important type of insurance for people to take out, only being pipped by car insurance, which is compulsory by law.

Not only is taking out buildings insurance an obligatory part of many mortgage agreements these days, with lenders therefore likely to cancel the deal should they find homeowners to be in breach of this, but, as last summer's floods illustrated, people can risk losing everything by attempting to save a few pounds in the short-run.

According to figures cited by the Times, the damage done to homes by the floods could come to some £2 billion, with the financial and sentimental damage afflicting those homes without adequate cover likely to be significantly worse than those which had a policy in place.

Graeme Trudgill, technical and corporate affairs executive at BIBA, explained: "75 per cent of people have contents insurance which means 25 per cent don't. This means that if something happens, they have lost everything.

"You can't afford to just go out and by another £30,000 worth of stuff."

The risk being run by millions of homeowners is even more baffling considering the falling costs of policies seen over the last few years, as insurers battle it out for customers.

As well as the large number of people neglecting home insurance all together, many more are spending over the odds when it comes to covering their house and contents by spending less time shopping around for a good deal than they do watching TV soaps every day.

Unsurprisingly, many homeowners plump for the easy option and take out a policy with the bank or building society with which they have their mortgage.

Though this may indeed be more convenient, it is often far more costly as there is only one option on offer.

"It's always important to get a second opinion," Mr Trudgehill added.

"You will actually find that you can save so much money by looking outside of your bank because a bank only sells one product – their product. If you go to a broker, you can get 40 products and there is bound to be one that gives you a better deal than the one with your bank."

As with most products, whether it be pet insurance or adventure holiday cover, it pays to shop around when choosing a policy for the home, though the price of failing to get the correct product could be significantly higher.