If you have a mortgage, your lender will insist that your property (and their security) is protected by buildings insurance. It usually pays out if your property is destroyed by fire, floods or subsidence (although you will need to check if you live on a flood plain, for example). Damage to fixed fittings such as baths and kitchens are often included, as well as sheds, greenhouses and garages.
You might be offered buildings insurance when you take out your mortgage, but you don’t have to take what’s on offer. Use the key policy information to shop around and get the best deal for you.
If you purchase a leasehold property (such as a flat in a block of flats) the freeholder may have arranged buildings insurance for the whole block, in which case you may not need your own buildings policy.
What isn’t covered?
Your cover is based on what your home would cost to rebuild. You can check whether you have enough buildings insurance through the Building Cost Information Service (BCIS) website. It has an online tool to help you calculate the sum you should insure your building(s) for, in case your home has to be entirely rebuilt.
You need to tell your insurer if you extend your property, for example with a loft conversion or conservatory. Your belongings are not covered – these need to be covered separately with contents insurance – see Contents insurance.
Keeping costs down
As always, shop around. You may also find that you get a better deal if you buy buildings and contents insurance together. Most policies have a standard excess charge which means you agree to pay the first part of any claim, for example the first £50 or £100. If you agree to pay a higher excess you might get a cheaper policy. Always compare what’s covered by a policy, not just the price – the key policy information will help you do this. Some might be cheaper than others, but they may not offer the same level of protection.
• Accidental Damage Cover – Includes cover for accidental breakage of fixed glass, fixed sanitary fittings, ceramic glass in cooker hobs of built-in units, fixed solar panels, cables, underground pipes or tanks serving your property.
• Building Cover – Cover for the home and fixtures and fittings, garden walls, hedges, paths, drives and patios, car ports, permanent swimming pools built of brick, stone or concrete and any outbuildings.
• NCD – Maximum discount offered: 1 year – 5%, 2 years – 15%, 3 years – 30%, 4 years – 32.5%, 5 years – 35%.
• Legal Liability – Up to: £2,000,000
• Metered Water – Up to: £1,500
• Loss of rent or costs for alternative accommodation – up to 20% of the sum insured.