Home Insurance – Buildings Insurance Explained

Home insurance Buildings insurance explained

There are 2 main types of home insurance and they are:

In this article we will focus on buildings insurance but before we begin..

What is home insurance?

Home insurance is a general term that is used to describe buildings & contents insurance. In a nutshell, homeowners insurance is a package policy. This means that it covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people.

How it works is that everyone in the same insurance class will pay annual insurance premiums given by the insurers. This figure can vary as some areas tend to have higher rates due to being situated in higher risk areas. For example, if you live in an area where storms or wild fires are more likely, you may have to pay more.

What is building insurance and what does it cover?

First off it is important to note that whether you live in a one bedroom flat or a 5 story mansion, your home is your home and you need to make sure you have the right protection in place. Although some mortgage lenders have now made it mandatory for homes to have buildings insurance – if you do not have it, you are leaving yourself and your home at risk.

If you have your own home it is not compulsory for you to have home insurance but it is highly recommended. If you are a landlord it is your duty to make sure the home has buildings insurance not the tenants.

Buildings insurance is a policy that covers the whole structure of your home and this includes things like your walls and roof. Most policies cover permanent fixtures and fittings such as the baths and fitted kitchens as well but make sure to read any fine print beforehand so you know exactly what you’re getting. It also covers the cost of repairing or rebuilding your home if it has been damaged.

All this being said, many home owners are still reluctant to take out buildings insurance due to the chance of not being paid out.

A recent survey carried out by the Association of British Insurers states that under home insurance, nearly four in five (79%) of policyholders who claimed received a pay-out.

This can be seen as both good and slightly worrying for some people however, it goes without saying that if you have a legitimate claim and have followed the correct procedures you will more than likely get a payout if something were to happen to your home.

Policies vary between insurers but in general you will be able to claim if your home has been damaged by the following:

You can claim if your has been damaged by:

  • Water damage (bursts pipes/escape of water)
  • Subsidence
  • Natural occurrences (storms and floods)
  • Falling trees
  • Fires
  • Vandalism/Riots

What doesn’t buildings insurance cover?

Each policy will have it’s own exclusions so be sure to read any fine print in detail before signing on the dotted line. Furthermore, you can not normally claim for damages or loss if your property has been left unoccupied for more than 30 or 60 days. However, if you let your insurers know about this in advance many will allow you to arrange cover.

On a final note, having buildings insurance could potentially save you a fortune down the line if something were to happen to your property. On the other hand it’s becoming more common that insurers are adding extra exclusions in their policies so they can get people to take out and pay for more cover.

We’ll leave it for you to decide on whether you should take out buildings insurance or not but our recommendation is that it’s always better to safe than sorry.

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