Whether you’re already a homeowner, or are hoping to be in the near future, you need to know your stuff when it comes to buildings insurance. We appreciate it’s not always easy to get your head around, and the list of ins-and-outs can seem endless, so in this guide we explain the basics.
What is buildings insurance?
Buildings insurance is what’s commonly referred to as home insurance. Buildings insurance covers your building’s structure – so its bricks and mortar, the fixtures and its fittings – from many forms of damage including fire, flood, storm, subsidence, a burst water pipe or vandalism.
If you have a fire, for example, your insurer would pay to get your property rebuilt as it was beforehand. Which means you won’t have to pay thousands of pounds to repair the damage yourself.
As well as the structure of your property being protected, a typical buildings insurance policy will cover outbuildings, paths, driveways, patios, garden walls, gates, fences, decking, permanently fixed hot tubs or jacuzzis, permanent swimming pools (those built of brick, stone or concrete) and hard tennis courts. If any such features lie within the boundary of your property they can be covered, but they’ll need to be declared for the most part.
Is buildings insurance essential?
If you’re going to purchase your home with a mortgage, you’ll be required to have buildings insurance, as your provider won’t give you a mortgage otherwise. The insurance must be enough to at least cover the outstanding mortgage, as your lender will want to make sure the money they put into your property is well protected. However, your insurer will require that the sum insured selected is adequate to rebuild/reinstate the whole of the building, including any outbuildings and other permanent fixtures.
Even if you own your home outright and don’t have a mortgage, it’s still worth having buildings insurance for the protection it gives you. If there was a major incident and you didn’t have cover, could you afford to repair your home?
Getting a quote for buildings insurance
Not all policies are the same, so when you’re shopping around for quotes, pay close attention to what is included as standard, as different levels of cover and extras are likely to impact the overall cost of your policy.
At the end of the day, whichever policy you choose, make sure it’s adequate and that you have the right amount of cover.
One of the most important questions you’ll be asked when you apply for buildings insurance is what your home’s rebuild value is.
It’s vital you don’t underestimate how much it would cost to rebuild your property from the ground up, as this could prove to be a problem, if you have to make a claim in the future. In fact, underestimating your rebuild value could result in a claim being partially paid, repudiated by the insurer, or your cover being invalidated. Likewise, don’t simply state your property’s market value, as this includes the land it sits on – meaning this figure may be far above how much it would actually cost to rebuild your home, although, in some circumstances, it could be lower than the rebuild costs. Doing this could bump up your premium price unnecessarily. To get as accurate a figure as possible, you can use the Association of British Insurers rebuild calculator for free >.