If your home is damaged or destroyed, buildings insurance will cover the cost of rebuilding it. If you plan to purchase your home with a mortgage, it is usually mandatory. Without buildings insurance, you might not be eligible for a mortgage.
This page will tell you what buildings insurance can cover. It also explains what to consider when choosing a policy.
What is buildings insurance?
Buildings insurance covers damage to your property’s structure. You also get coverage for garages, sheds, fences, and the cost of replacing pipes, cables, and drains.
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Your insurance policy should cover all costs associated with rebuilding your home. This includes demolition costs, site clearance and fees for architects.
Most buildings insurance covers damage or loss due to:
- Fire, explosion, storms and floods.
- Vandalism, theft, and attempted theft
- Frozen and burst pipes
- Lampposts, fallen trees, aerials and satellite dishes
Subsidence
- Vehicle or aircraft collisions.
- Are you looking for buildings insurance?
Mortgages
The mortgage will require that you have sufficient building insurance to cover the outstanding mortgage. You should be able to choose an insurer from the list provided by your lender. If your mortgage package does not include insurance, they can reject your choice of insurance provider but cannot force you to use their insurance policy.
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When you sign a contract to buy a house, you must also purchase buildings insurance. You are responsible for maintaining the house until it is sold. Keep your insurance coverage until that time.
You are responsible for insuring your home until the mortgage lender sells it. If you don’t live there any longer, your policy may be canceled.
You don’t need a mortgage
Although building insurance is not mandatory, it is recommended. Consider how much you could afford to rebuild your home if it was damaged or destroyed.
Leaseholder
You may be required to have buildings insurance through a named insurer. The freeholder may also require you to take out insurance, and you may be charged for it.
Tenant
The insurance is usually taken out by your landlord, but you could be responsible for any damage or loss to fixtures and fittings. This may be covered by your household contents insurance.
What amount of buildings insurance do you require?
It is important that you have insurance for the cost of rebuilding your home. This is the sum insured. It is the sum insured that the cost of rebuilding your house will not exceed the value of your home or the current market value, if it were to be sold. Rebuild costs are often less than current market value so ensure you have adequate insurance.
The Association of British Insurers has an online calculator that will help you calculate the cost of rebuilding your house.
Many insurers provide unlimited coverage so that you don’t need to calculate the rebuild costs. If you already know the costs, it might be cheaper to shop around for a policy tailored to your needs.
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A policy may calculate the amount of insurance based on the location and type of your home. This may not be the right amount for your property so make sure you have enough coverage.
As rebuild costs rise, it is important to review your buildings insurance coverage regularly. Insurers offer policies that automatically increase your insurance coverage in accordance with rising rebuild costs.
Keep in mind that if you make any home improvements, such as an extension or loft conversion, your rebuild costs could increase. You will need to ensure you are covered.
You can get a survey done by the Royal Institution of Chartered Surveyors to determine the cost of rebuilding if your property has unique features such as a thatched roof or a listed building.
Do you need extra buildings insurance?
To protect yourself against other risks, you might consider adding buildings insurance. This coverage will require you to pay higher premiums. Additional insurance can be purchased for:
- Flooding or subsidence is possible if you are in an area of high risk
- accidental damage to your home
- Alternative accommodation is available if you need to leave your home after you make a claim
- Damage to fencing, gates, driveways, and boundary walls
- Underground pipes, cables, gas, and electricity supply damage
- Glass in windows, doors and conservatories.
- Liability coverage if another person’s property is also damaged
- Legal expenses coverage
