Buildings Insurance is essential for anyone who owns a property as it covers the cost of repairing damage to a building’s structure or completely rebuilding if the property was totally destroyed.
Without buildings cover, you could end up with a crumbling home that you can’t afford to put right, or, worse still, an outstanding mortgage to pay on a property that’s been burned to the ground!
If you have got a mortgage, or are applying for one, your lender will ask for proof of buildings insurance as part of the terms and conditions of the mortgage.
What does Buildings Insurance cover?
Buildings insurance covers the structure of a property, such as the walls and roof, against damage, loss and theft, as well as any permanent fixtures and fittings, including bathroom suites, fitted kitchens and built-in cupboards.
In other words, if you were able to turn your home upside down and gently shake it, everything that stays fixed and doesn’t fall out would be insured under your buildings insurance.
Most buildings policies usually also cover outbuildings within the property boundaries such as garages, greenhouses and garden sheds. However, fences, gates, swimming pools, drives and other areas not considered ‘buildings’, might not be included as standard. With some policies these can be added at little cost.
Any possessions kept in the buildings including your outbuildings, need contents insurance, as opposed to buildings insurance.
Policies vary, but decent comprehensive buildings Insurance should cover you in the event of:
- Fire and smoke damage
- Storm and lightning damage
- Burst pipes
- Explosions (caused by gas leaks or electrical failure, for example)
- Subsidence and land heave (provided it’s not pre-existing)
- Communication equipment collapsing, such as aerials and satellite apparatus
- Theft or attempted theft of buildings, or parts of buildings
- Vandalism and malicious damage
- Falling trees and branches
- Damaged caused to someone else’s property (by trees in your garden, for example)
Extras (or ‘add ons’) to standard cover
Standard policies usually include cover for those events listed above, but there are other elements which many people choose to add to their existing cover.
Three of the most popular and useful optional extras are:
- Accidental damage – Limited cover for accidental damage to glass in doors and windows, and to bathroom fittings, sometimes forms part of most standard cover. But if you want full accidental damage cover you might need pay for it as an ‘add on’. If you put your foot through a ceiling, for example, the repair work needed would then be covered.
- Home emergency cover – Cover for home emergencies can prove extremely useful. If your boiler breaks down in the middle of winter, for example, it could ordinarily take several days or longer to find a plumber to fix it. With home emergency insurance you would be guaranteed rapid help. Most such cover includes loss of house keys, drainage issues and broken windows that represent a security risk and need replacing fast.
- Alternative accommodation – If your home was flooded to the extend it became uninhabitable, alternative accommodation insurance would prove very helpful. It covers the cost of renting another property, or even hotel accommodation, for a stipulated period. Some policies include this as standard, so check your policy wording.
How much cover do you need?
When working out the maximum cover your property needs, you should bear in mind that the sum insured is based on the rebuild value, not the current market value (i.e. the price at which you could sell it to someone else).
Rebuild value, not market value
Imagine your home was destroyed in a fire; how much would you have to pay a builder to reconstruct it? This is the maximum level of insurance that you need. And don’t forget, it’s better to be over-insured than under-insured.
Most standard policies now provide blanket cover up to £500,000, or even more. But whether this is the case or not, it’s still your responsibility to check the maximum pay out in the event of a claim would cover the full cost of rebuilding your home.
How to work out the rebuild cost
There are a number of ways to go about working out the rebuild figure:
- Ask local builders – If you know a good, reputable local builder, they should be able to give you a pretty accurate figure. It’s a good idea to get a couple of quotes, just in case. Don’t forget to include the professional fees also involved, such as those architects and solicitors would charge.
- Find a surveyor – Use a locally recommended surveyor, or you can approach the Royal Institute of Chartered Surveyors, (RICS), who will put you in touch with a qualified surveyor.
- Use RICS’ guides and information – RICS provide a Building Costs Information Service (BCIS Website) which gives guidance on rebuilding costs and has a useful rebuilding costs calculator. This is mainly for those with standard-build homes.
- Unusual properties – If your property is listed (grade I or II) and/or has an unusual construction like a thatched roof, bear in mind it may cost more to rebuild than most properties.
Common mistakes when taking out buildings insurance
When taking out buildings insurance, people often make assumptions about what the cover includes without asking the insurer or reading the policy small print. They can then be shocked and disappointed when it comes to making a claim, as all policies include exclusions of some sort or other.
Exclusions may include the following:
- General maintenance and wear and tear – Gradual damage occurs to most homes over time, such as that caused by condensation and weathering to roofs and brickwork. You’re expected to deal with such issues and keep the property in good condition.
- Non-disclosure – If you fail to tell your insurer certain information, it could invalidate any future claim you might make. If, for example, your property has experienced flooding or subsidence prior to your taking out buildings insurance, the insurer must be told.
- Fencing – Fencing is only covered if it forms part of the whole property (such as a boundary fence), rather than decorative fencing such as garden trellis or screens.
- Away for long periods – Standard policies usually stipulate that you leave a property unoccupied for no longer than 30 days. Any damage that happens after this time would not be covered. If you are going to be away for longer, talk to your insurer as you may be able to extend the time limit.
- Central heating boilers – Boiler breakdown and repair is not normally covered by standard policies. If you want boiler cover you will usually have to buy it as additional cover, or a stand-alone policy.
- Neighbour disputes – Legal expenses are usually covered if something happens to your property which also damages a neighbour’s. But personal injury or disputes concerning boundary rights, access and other typical areas of conflict between neighbours, aren’t unless you pay to include legal expenses cover.
How to save money on buildings insurance?
Buildings insurance can be bought as a stand-alone policy, but it’s nearly always cheaper to buy at the same time as contents insurance as part of a general home insurance deal (‘home insurance’ refers to both buildings and contents cover).
The cheapest deals available aren’t necessarily right for your needs, so it’s always worth checking you’ve got the best deal for the level of cover you do need. Here are a few tips:
- Compare deals by shopping around – It goes without saying that you should shop around for your individual buildings insurance, or home insurance, and get a number of different quotes. Many people still simply accept whatever their mortgage provider or bank offers them, and end up paying more than they need to for the same or very similar cover. Use online comparison tools or brokers such Policy Expert.
- Exclusive deals – Brokers work closely with the insurance providers, so can often offer exclusive deals that you won’t find anywhere else. Policy Expert work with some of the best insurers and always vet our providers’ standard policies to ensure they offer a level of cover which we think our customers will require as a minimum.
- A secure home means lower premiums – If the property you want to insure has a high level of security, you’re more likely to be offered a discount and pay lower premiums. British Standard locks on doors and windows and high quality alarm systems may mean you’re seen as less of a ‘risk’ by insurers.
- No claims discount – If you’ve built up a number of years of no claims, it’s more than likely you’ll get a discount from an insurer. If you already have home insurance, don’t just accept what your current provider offers you, ask around for similar cover and see what discounts you can get.
- Pay up front in one go – It will generally cost you less if you pay up front for your home insurance rather than on a monthly basis.
- Don’t pay for cover you don’t need – Some insurers include cover elements as standard which others may only offer as ‘add-ons’. This might be freezer contents cover, boiler cover, legal expenses or extra outbuildings insurance. Whatever the additional cover, you might not need it. Ask for anything you feel is surplus to your requirements to be removed and a new quote provided.
- Avoid paying for dual cover – You may find you’re covered for certain elements of your home insurance in other ways. Some bank accounts or credit cards now offer away-from-home cover for you possessions, for example, or legal insurance. Again, if you already have such cover, ask the insurer if they can provide a re-quote having removed the elements you don’t need.