Buildings insurance is designed to protect home’s bricks and mortar, plus any permanent fixtures and fittings. This includes roof, floors, walls, doors and windows. Other features, such as garages, patios, pipes and drains may also be covered, but how far they are insured will depend on which provider’s policy you take out.
Typically, buildings insurance covers eventualities such as: malicious damage, subsidence, fallen trees; fire; flooding; storm damage; water leaks from frozen and burst pipes; and oil leaks from a heating system.
Occurrences that may not be covered include: household wear and tear; rot caused by leaking gutters; storm damage that’s affected garages and fences; damage caused by animal pests (such as insects, rodents and birds); and shoddy workmanship.
Insurers base buildings insurance premiums on the amount it would cost to rebuild the property if it was totally destroyed. This amount is called the ‘sum assured.’
Be aware that this is not the same figure as the property’s open market value, which relates to the price someone might be prepared to pay to buy a home.
When making calculations, insurance companies frame their figures based on their knowledge of the properties in an area, along with the information provided about the property concerned.
The best way to purchase buildings cover is by going online, shopping around, and comparing policies to find the one that’s most directly appropriate.
Check for important features such as ‘alternative accommodation’, where a policy would cover the cost of you and your family staying in a hotel, or rented accommodation, should they property require extensive repair following major damage, such as a fire or flood.
It’s important to find the right level of cover at the best price.
Many homeowners assume that, when they take out a mortgage, they are obliged to take out the buildings insurance offered by their lender. This is not the case. Rather than sign up straightaway with your lender, shop around and compare deals to see if there’s an alternative that better suits your needs.
When it comes to keeping down the cost of buildings insurance premiums:
- Consider a ‘combined’ buildings and contents policy Discounts often exist for customers who buy both types of cover from the same provider
- Avoid monthly premiums You’ll likely end up out-of-pocket compared with making an up-front, annual payment for cover
- Cut out the frills Only pay for extra levels of cover you really need
- Consider a higher excess The excess is the amount you agree to pay in the event of a claim before the insurance policy kicks in. A higher excess can reduce premiums, but make sure you’d be able to afford it before signing up
- Build up a no-claims discount Some providers offer discounts where policyholders refrain from making a claim for an agreed number of years. Consider meeting the costs of minor repairs to achieve this but, again, make sure you’re financially comfortable with any decision you make.
Make a note of when your cover is due to end and be ready to research the market, shop around and, if necessary, jump ship to a rival provider just before the deadline strikes. Comparing deals and threatening to move away for a better deal is the best way to keep your existing provider on its toes in terms of the value they can offer you.
