It’s crucial that you set up a buildings insurance policy to offer coverage for the cost of outside property damage as well as the cost of reconstructing your house should it be damaged or destroyed.
If you intend to purchase your house using a mortgage, it is often mandatory to obtain buildings insurance because the majority of lenders will not grant a mortgage without suitable property insurance coverage.
In contrast to contents insurance, which protects any belongings within the structure, buildings insurance only covers the exterior of the property.
Since the landlord, property management firm, or freeholder will be responsible for the outside of the property if you reside in a flat, you shouldn’t need to get a building insurance policy. As a result, they are accountable for buildings insurance.
What Does 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.
What does building insurance cover in terms of loss or damage?
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
Subsidence
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.
Freeholder Building Insurance
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.
Leaseholder Building Insurance
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.
Tenant building insurance
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
