Buildings insurance is compulsory with a mortgage, but the good news is you’re free to shop around for an insurance provider that suits your needs - not just what your mortgage provider offers you. This handy guide will give you the basics of buildings insurance to make sure you get the best coverage for you.
In this guide:
Building insurance insures the literal structure of a building, meaning the walls, roofs and floors, against damage. Most policies will also usually cover permanent fixtures like a fitted kitchen or bathrooms. If you need to cover outbuildings, like garages or sheds, there are policies that will do this but you’ll need to seek them out.
Building insurance will cover the cost of rebuilding or repairing your home should the structure or fittings become damage. Cover obviously changes between providers, you should be able to claim if your home has suffered:
- Fire, smoke and explosions
- Water from leaking pipes or from external flooding
- Falling trees
- Vehicle collisions into your property
- Storms and adverse weather
If you’re a homeowner it is highly recommended that you get building insurance. Legally you need it if:
- Your home is mortgaged – it’ll usually be a condition of the mortgage
- You live in a flat and own the freehold – this could be individually or jointly with other tenants. If you only own the leasehold, it’s usually the landlord’s responsibility
- You’re a landlord who rents out property that you own
If you rent your home, you won’t need buildings insurance. But it is probably worth taking out contents insurance just in case.
Remember you can choose whichever provider suits you best. No one can force you to take out insurance with them, and you should carefully consider your options before making a decision.
You should work out first and foremost how much cover you’ll need. This comes down to, how much would it cost to rebuild your home? This amount isn’t the same as the value of your home were you to sell it, but there are plenty of tools to help you. Use the Association of British Insurers’ rebuild calculator – you need to register but it is free to use.
Not all providers will ask for a rebuild sum – some may offer an unlimited sum insured. If this is the case there are likely to be exclusions (things that won’t be covered). Again, carefully check your policy before you make a decision.
Most insurance policies will have exclusions. You should read the policy wording very carefully to avoid having a claim turned down. Make sure you know what is covered and what’s not before choosing your policy.
Garden fences which are damaged in a storm or fitted kitchen appliances, like boilers may not be covered outright. Some policies will cover things like this, but some won’t or will have it as an option extra. It’s very important you know what your signing up for.
If you have a thatched roof be very careful about your policy, many providers will not cover thatched roofs as standard. It’s crucial you check this before choosing a provider and policy, standard insurance will be for properties built from bricks with tiled roofs. Make sure that you tell your insurer what materials your home is built from, this will affect things like your premium!
Check that accidental damage is included within your cover. You’ll be surprised how many people don’t have accidental damage covered within their policy. You don’t want to be caught out.
Accidental damage cover includes things like broken windows, cracked basins and damaged pipes. If you don’t have this in your policy and you claim, you will be denied and have to pay for the damage yourself.
Make sure your policy covers what you need it to. If you want your boiler covered for example, check if it’s included as standard or if you’ll need to pay extra. Not all policies will offer boiler covered and some will even include an annual servicing.
If you think that you might want to extend your property one day or do a loft conversion, then you need to check to see if your policy will allow for this. Some policies won’t cover you while you have building work done, but others will allow for a degree of cover while the work is ongoing. If you do have work done on your property make sure you tell your insurers.
Make sure you take into account where your property is! If you are in an area which may flood, make sure you are covered for this! It may affect your premiums, but you should make sure that your insurer covers you regardless.
It’s important that you keep your property in a reasonable condition - most insurers will expect this from you. So, make sure you keep your gutters clear and check your walls for rot. It’s important you have things like smoke alarms and don’t put things down the toilet which may cause blockages.
Keeping your roof fit for purpose is another important aspect of maintaining your property - buildings insurance requires you to tell your provider if there’s an issue. You must know if there is a problem to inform them. Don’t let your house fall down around your ears and then expect a pay out.
This is the basics of building insurance. Make sure you talk to your provider about the ins and outs of your policy before signing up. It’s important that you get the policy right for you, not just the one that’s cheapest or quickest. Make sure you know what you’re paying and why. Don’t just expect a policy to suit you because it’s the provider’s standard.