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What does buildings insurance cover?

What does buildings insurance cover?

Category: Insurance
Author: Tim Leonard
Updated: 25/06/2018

Before granting you a mortgage, your mortgage lender will require you to have a professional survey carried out to bring to light any problems there may be with the structure of the house, and also to ensure adequate buildings insurance cover is in place.

Subsidence, for example, may only be covered by your policy if you have a fully comprehensive survey completed. Suitable buildings insurance will help ensure you're prepared for every eventuality, so you needn't suffer excessive financial shocks.

What does building insurance cover?

  • The cost of permanent structures in your home

  • The land you own

  • Outbuildings (some policies)

It protects your building against the costs incurred by damage resulting from:

  • Fire

  • Floods and storms

  • Vandalism or malicious damage

  • Other natural disasters

  • Damage from vehicles or falling trees

It may also cover:

  • Frost damage to pipes

  • Subsidence – which should be noted in a professional survey

  • Accidental damage to permanent fixtures

It does not cover:

  • Self-inflicted damage – e.g. DIY gone wrong

  • War or terrorism

  • Pollution

How much does buildings insurance cost?

Every property is different, but the main factors affecting the cost of your buildings insurance premium will be:

  • The structure of your property

  • The age of your property

  • Your postcode

  • Age of policyholder(s)

  • Number of bedrooms

  • Type of property

  • Material it is made from (concrete, brick, wood...)

  • Stability of the land

  • The risk of flooding

There are two main categories of buildings insurance:

1. Insurance calculated by the number of bedrooms in your property. The more bedrooms your property has, the higher your premium. However, most policies have an unlimited sum per room.

Pros – it's convenient and you don't need to worry about not being adequately covered

Cons – you could be paying for more cover than you need

2. Insurance calculated by the sum you need to insure. The sum insured is the total cost of rebuilding your house, so it's important this is calculated properly. It is recommended that you get a chartered surveyor to calculate the rebuild cost of your home. Alternatively, if you have recently applied for a mortgage or remortgaged your home, dig out your valuation report or ask your lender to send this to you. You could also do it yourself with the free BCIS/ABI House Rebuilding Costs Calculator.

Pros – you only pay for the cover you need

Cons – it's a long and complicated process

Additional features that could be included in your policy:

  • Accidental damage for items in your home. However, this may overlap with your contents insurance, so check that both policies are not insuring the same thing.
  • Public liability covers you if someone injures themselves on your property. Levels of cover differ widely between policies.
  • Alternative accommodation will be provided should you need to rebuild or make renovations to your property and need somewhere else to stay while the work is being carried out.

Other things to bear in mind

  • Flats and apartments - If you live in a flat or an apartment, you will need either freehold or leasehold flat insurance. If you own the leasehold for a single flat, you should not have to pay the full cost, as this is normally arranged with the freeholder of the building or the local council. However, liability is important (for example, if your bath were to overflow and damage the property beneath yours, you need to be covered adequately), but the terms for flat owners will vary from policy to policy.
  • Landlords - If you are a landlord, tenants liability insurance covers you for any damage to the structure of your property by your tenants. You should always have landlord buildings and contents insurance cover as well, because the amount of damage to the structure of your property could cost more than the deposit you are given.

Common buildings insurance exclusions may include:

  • Damage from ageing

  • Damage from general wear and tear

  • Wilful neglect of the property

  • Intentional damage

What next?

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Use our insurance comparison service to help you find the best deal

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.