It is important that you arrange a buildings insurance policy to cover the cost of rebuilding your home if it is damaged or destroyed, plus to provide cover for the cost of damage to the exterior of the property.
It is usually compulsory to take out buildings insurance if you are planning to buy your home with a mortgage as most lenders will not offer a mortgage without adequate insurance cover.
Buildings insurance differs from contents insurance in that it covers the exterior of the property, whereas contents insurance covers any possessions within the building.
If you live in a flat, you should not need to take out a building insurance policy as the landlord, property management company or freeholder will be liable for the exterior of the property. As such, buildings insurance is their responsibility.
What does a building insurance policy cover?
While the specifics of individual policies do vary, most building insurance policies provide cover for:
- The cost repairing damage to the structure of your property
- The cost of repairing damage to garages, fences and sheds
- The cost of repairing or replacing drains, cables and pipes
- The cost of repairing or replacing your kitchen or bathroom
Your buildings insurance should cover the full cost of rebuilding your house in the event of it being destroyed or damaged beyond repair – this is known as the ‘sum insured’ and should also include the cost of demolition, site clearance and any necessary fees such as architects.
Do consider however that the cost of rebuilding your home would not be the same as the price you originally paid for the property, or its current value should you choose to sell it. Rebuild costs are generally less than market value.
Loss or damage covered by your building insurance typically includes:
- Theft, attempted theft and vandalism
- Fire, floods, storms, explosions and earthquakes
- Frozen and burst pipes
- Fallen trees, aerials, lampposts or satellite dishes
- Vehicle or aircraft collisions
Contact your chosen insurer to determine exactly what is included in your policy.
What is exempt from a building insurance policy?
A building insurance policy typically does not cover anything that can be removed and taken to a different property. This is classified as ‘contents’ and, as such, would be covered by your contents insurance policy.
The type of building insurance policy you require will depend on whether you are a freeholder, a leaseholder or a tenant.
Your mortgage will specify you must have a valid building insurance policy.
If you do not have a mortgage, it is advised you take out building insurance, in the event that your home is damaged or destroyed.
The terms of your lease may specify that you have a valid building insurance policy. If you contravene, the freeholder may take out the policy, then charge you for it.
Typically, your landlord will be liable for building insurance, although you may be responsible for and damage to fixtures and fittings. Check to confirm if this is covered by your contents insurance.
Do you need extra buildings insurance?
Whilst a standard building insurance policy should be sufficient for your needs, you may wish to consider taking out extra buildings insurance to cover for you for other risks.
Whilst you will have to pay additional premiums for extra cover, it may be worth the cost for the peace of mind.
You can choose to take out extra insurance for:
- Accidental damage to your home
- Alternative accommodation if you have to temporarily move out of your home after you’ve made a claim
- Flooding or subsidence if you live in a high risk area
- Damage to boundary walls, fences, gates, driveways and swimming pools
- Damage to underground pipes, cables, gas and electricity supplies
- Damage to glass in windows, doors, conservatories and skylights
- Liability cover if someone else’s property is also damaged
- Legal expenses cover