Buildings insurance is a type of insurance that covers the physical structure and fixtures of your home should something untoward happen. As well as covering your home, many buildings insurance policies also protect outdoor buildings such as greenhouses, garages and sheds. While buildings insurance is not mandatory, if your property is mortgaged, the chances are that your lender will require you to take out some sort of buildings insurance in order to keep their investment safe.
The Benefits of Buildings Insurance
Buildings insurance is a valuable type of insurance policy that can financially cover you if your property is damaged. There are a range of scenarios which are typically covered by buildings insurance policies.
To begin with, buildings insurance pays out should your property become damaged by a natural event, such as a flood, a storm or an earthquake. Even if you live in an area with high risk of flooding, thanks to a government agreement, your insurance broker will still cover you.
Buildings insurance also covers human incidents such as accidental damage and vandalism. However, the amount of cover provided in the case of accidental damage is often limited to certain items.
Things to look out for
- There are two methods by which buildings insurance can be calculated: sum-insured or bedroom-rated. Sum-insured buildings insurance requires you to work out how much cover you think you will need to cover your home and bedroom-rated does not need to you work out exact costs. Instead, bedroom-rated cover estimates the amount of cover you need based on the number of bedrooms in your home. As it is hard to work out which of these two insurance types is better value for money, it is a wise idea to get quotes for both types of cover.
- If you live in an area with high clay content, you may have to pay excesses up to £2,400 should you make a claim for subsidence.
- If you are buying buildings insurance to satisfy the terms and conditions of you mortgage, find out whether your mortgage provider offers a buildings insurance or charges a fee if you take out buildings insurance elsewhere. Indeed, many lenders charge £20 to cover the cost of checking that your third-party buildings insurance is satisfactory.
- Be honest when taking out buildings insurance. If you do not disclose a known or potential problem to the insurance broker, it may invalidate your policy if you make a claim later on.
- It is always a good idea to find out of your insurance policy will provide you with alternative accommodation should something severely unfortunate should happen to your home.