Choosing Building Insurance

Building insurance is not strictly a legal requirement however it will always be a condition of the mortgage offer that you have Buildings Insurance in place.

Why do I need it?

Building insurance covers the cost of rebuilding your home if it is damaged or destroyed. When it comes to buildings insurance, many mortgage lenders often won’t approve a mortgage unless you have adequate buildings insurance in place for the property. 

Buildings insurance covers the structure of the property and will cover you in the event of a fire, water damage, collision damage – whether that be from a falling tree or vehicle. Policies can also include claims against acts of vandalism and oil leakage from defective central heating systems as well as explosions caused by either gas or electrical faults.

When do I need it?

At the point of exchange, you are legally bound to purchase the property therefore you should have buildings insurance in place from then. This way you are protected should something happen. 

What’s different about leasehold?

If you are buying a leasehold property quite often the freeholder will cover the buildings insurance however in some instances there may be areas that you are legally responsible for, it’s best to check the terms of the lease to get confirmation (your solicitor should have a copy of this). You will probably be required to pay a service charge that includes a contribution for the building insurance, if this is the case you should ask for a copy of the building insurance for your own records. If you are purchasing with a mortgage your solicitor may already have this in hand.

Get quotes

Shopping around is a great way to get the best price however ensure that you compare like for like. Be as accurate as possible and consistent when giving details and the value of the property, take five minutes before you contact anyone to write down any information that they may ask:

• Address including postcode
• Age and type of property
• Detailed security information i.e. alarm, door locks, window keys etc
• How much the property is worth
• How much it would cost to rebuild (you can use the BCIS rebuild calculator for this)

It’s important to be aware that when using online websites for your home insurance they could be making many assumptions about you – if these assumptions are incorrect it will void your insurance policy. Using an advisor who is qualified to give advice on your home insurance will ensure that you have a policy that fits both your mortgage lenders and your requirements. Advisors also have some tips on how to make your policy stronger.

Contents insurance

Building insurance covers the cost of rebuilding your home from the ground up, contents insurance covers the cost of replacing the belongings in your home if they are damaged, destroyed or stolen. This can be taken out with your building insurance provider or as a separate policy. If you are buying a leasehold property that already includes your building insurance, you may want to insure your personal items should anything happen.

Contents insurance not only covers your belongings inside your home, it can also cover your belongings outside the home, however this does not always come as standard and may have to be added on additionally. Your contents can also be insured for accidental damage - who hasn’t spilled a glass of red wine on the carpet? Again, this is not usually standard within policies and is often an add on. It is important that you don’t make any assumptions on what your contents insurance covers as you could end up caught out when you need it most.