What Insurance Do I Need to be a Foster Carer?

You do not need a specialist home insurance policy because you foster. However, you do need to inform relevant insurers and make sure your cover reflects your role. You should also understand how fostering affects your tax and National Insurance position.

At Step by Step, we give prospective foster carers clear, straightforward guidance so you can move forward with confidence.

Home Insurance for Foster Carers

In most cases, you do not need to replace your standard home insurance policy. Fostering does not usually require an entirely new buildings or contents policy.

What is essential is that you:

• Tell your home insurer that you are approved as a foster carer
• Ask whether fostering affects your current policy
• Confirm that you are satisfied with the level of cover in place

When speaking to your insurer, check:

• Whether your premium will change
• Whether exclusions apply because you foster
• Whether there are limits on the number of children covered
• Whether you must notify them when a child moves in or leaves

Being transparent protects you and avoids complications if you ever need to make a claim.

Are Foster Children’s Belongings Covered?

You should confirm whether a foster child’s possessions are included under your contents insurance and whether any single item limits apply.

Accidental and Intentional Damage

It is important to check whether your policy covers accidental damage caused by members of your household, including foster children.

You should also ask how your insurer handles intentional damage and what evidence may be required to make a claim. Policies differ, so clarity is key.

Car Insurance Requirements for Foster Carers

If you will be transporting a foster child, your motor insurance must be fully comprehensive.

You will also need to add business use to your policy. This ensures you are properly covered when driving a child to school, medical appointments, family contact or activities connected to your fostering role.

Speak to your insurer to confirm:

• That your policy is fully comprehensive
• That business use is included where required
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• Whether any change affects your premium

This is usually a simple update, but it is an important one.

Legal and Liability Considerations

You should ensure that your insurance arrangements provide appropriate protection if accidental damage occurs to property or belongings as a result of a child in your care.

Ask clear questions so you understand:

• What types of damage are covered
• Whether exclusions apply
• What the claims process involves

Understanding your liability position gives reassurance and helps you make informed decisions.

National Insurance and Tax Status

Foster carers are classed as self-employed for tax purposes.

Many foster carers do not pay income tax due to Qualifying Care Relief, which provides generous tax free allowances. However, your National Insurance position still matters.

Some foster carers choose to pay voluntary Class 2 National Insurance contributions to maintain entitlement to the State Pension and certain benefits.

Whether you need to pay National Insurance will depend on your individual circumstances. It is sensible to seek up to date guidance from HM Revenue and Customs or a qualified adviser.

Planning responsibly ensures fostering works for both your household and your long term financial security.

What If Something Is Not Covered?

If your insurer places restrictions on your policy or excludes certain types of cover, you may be able to adjust your policy or explore alternative providers.

If you foster with Step by Step, we discuss these practical considerations during your assessment and preparation. We support foster carers across Hampshire, Surrey, Dorset, Wiltshire, West Berkshire and West Sussex, and always ensure you feel informed and confident every step of the way.

Foster carers with Step by Step also get free membership to The Fostering Network, who can provide financial advice and information.

Thinking About Becoming a Foster Carer?

Insurance and financial planning are important parts of the journey. Asking these questions shows that you are thoughtful and responsible, qualities that make excellent foster carers.

• Visit our Fostering page to learn about the role, training and support we provide
• Contact our Fostering team for an informal conversation

With the right information and support, you could provide the stability and care that changes a young person’s future.