WHAT IS BUILDINGS INSURANCE?

Do you need buildings insurance?

Buildings insurance is essential for financial protection against damage to the physical structure of your home, including key elements like walls, roof, and floors, and often extends to cover fixtures and fittings.

For homeowners, having buildings insurance is critical to cover potential repair costs if your home is damaged. While not legally required, it’s typically a condition set by mortgage lenders.

Therefore, whether you own your home outright or have a mortgage, prioritising this insurance is important to safeguard your property.

Do I need buildings insurance if I’m a tenant?

If you’re renting a property, you don’t need to worry about buildings insurance as it’s the landlord’s responsibility to ensure the property is adequately insured.

However, as a tenant, you should consider getting contents insurance to protect your personal belongings within the rented property.

What does buildings insurance cover?

• Buildings insurance typically covers damage to your home from a variety of events, although the specifics can vary between policies and insurers. Commonly included are:
• Vandalism.
• Subsidence (ground sinking, causing your house to shift).
• Damage from falling trees.
• Fire, smoke, and explosions.
• Impact damage from car and lorry collisions.
• Water damage from leaking pipes.
• Oil leakage from your heating system.
• Natural events like storms and floods.
• Additionally, many policies extend coverage to other structures on your property, including garages, outside walls, and driveways.

What doesn’t buildings insurance cover?

Buildings insurance typically doesn’t cover general wear and tear of your property, and each policy comes with its specific exclusions. Commonly, you won’t be covered for damages caused by:

• Leaking gutters.
• Infestations of certain pests, like insects and birds.
• Frost damage, except when it leads to issues like a burst pipe.

Additionally, damage to gates and fences from storms is often not included in the coverage.

Since exclusions can vary significantly between different policies, it’s crucial to read and understand your policy details carefully.

What types of buildings insurance are there?

Buildings insurance comes mainly in two types – sum insured and bedroom rated:

Sum Insured

In this type, your coverage amount is based on the estimated cost of rebuilding your home from scratch.

It’s different from your home’s market value, which could be higher or lower. Since rebuild costs can increase over time, index-linked policies are advantageous as they adjust the sum insured to reflect the changing rebuild costs.

While it requires careful calculation, this method ensures you pay only for the coverage you need.

Bedroom Rated

Here, the coverage amount is based on the number of bedrooms in your home.

This usually results in a high sum insured, helping to safeguard against under-insurance.

It eliminates the need for you to calculate the rebuild cost of your home. However, there’s a possibility of paying for more coverage than necessary with this method.

What to look for when comparing policies

• Index-Linked Cover: Check if the policy includes index-linked cover to ensure the sum insured keeps up with the rising cost of building materials.
• Unlimited Sum Insured: Some policies offer a very high or unlimited sum insured, with fixed premiums. This means you might not be able to reduce the insured amount for a lower premium.
• Alternative Accommodation: Look for coverage that includes alternative accommodation costs if your home becomes uninhabitable due to damage.
• Excess: Understand how much you’ll need to pay out of your pocket if you make a claim.
• Escape of Water: Ensure the policy covers damage from burst pipes or water tanks, which is a common issue in homes.
• Accidental Damage: Check if the policy covers accidental damage, such as broken windows or damage to fixtures. This is often an additional feature.
• Home Emergency Service: Some policies include home emergency services like heating and plumbing repairs as standard, while others offer it as an optional extra. Coverage and costs can vary, so it’s worth shopping around.
• No-claims Discount: Find out if the insurer offers a discount on premiums for not making a claim over a certain period.