Buildings insurance protects the structure of your property. It covers the cost of repairing or rebuilding your home if it’s damaged or destroyed as a result of subsidence, heave (when the ground rises), fire, flooding or vandalism.
Buildings insurance is commonly bought alongside contents insurance as part of a combined home insurance policy as insurers often offer a discount when both policies are purchased. However, separate cover can be bought if preferred, or if certain circumstances dictate that a specialist policy is required.
What does buildings insurance cover?
Buildings insurance will typically cover your property’s roof, floors, windows, doors and walls, as well as permanent fixtures and fittings such as built-in wardrobes, kitchens and bathrooms.
Outside constructions such as garages, pipes, patios, drains, swimming pools and ponds may also be covered as standard or may need to be specified, depending on the policy.
Buildings insurance will usually cover you for loss and damage caused by:
- subsidence and heave
- fire, flooding, storms and earthquakes
- frozen and burst pipes
- fallen trees, lampposts, aerials or satellite dishes
- theft, attempted theft and vandalism
- vehicle or aircraft collisions.
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What does buildings insurance exclude?
When comparing buildings insurance, be sure to check what’s not covered. Policies will typically exclude:
- wear and tear, including corrosion and rust
- wet rot, dry rot or frost damage
- storm damage to fences and gates
- damage caused by insects, birds, vermin and other pests
- poor workmanship.
Most policies will only provide cover on the condition your home is not left unoccupied for more than 30 consecutive days at a stretch. If your home will be left empty for longer than this, let your insurer know as soon as possible to discuss options.
If you are in an area prone to subsidence, your buildings cover is likely to be relatively expensive and you are likely to face a steep excess (the amount deducted from any claims payment you receive) on subsidence-related claims.
A buildings insurance excess might typically be £200, but for a property at risk of subsidence it could be £1,000 or even £5,000, especially if a subsidence claim has been made in the past.
Who needs buildings insurance?
Whether or not you need buildings insurance will partly depend on whether you own or rent your property.
If you’re buying a house, your mortgage provider will usually require you to buy buildings insurance as a condition of the mortgage. But if you own a home without a mortgage, it will be up to you to decide whether you need cover.
Requirements are slightly different if you own a leasehold flat. In this situation, the owner of the freehold should arrange buildings insurance for you. If you own the freehold or a share of it, however, you’ll need to arrange your own cover.
Finally, if you rent your home, it’s usually the landlord’s responsibility to arrange buildings insurance. But always check to be sure.
Are there any additional cover options with buildings insurance?
For more comprehensive buildings insurance, you can choose to bolt on a range of cover options for an additional charge. These can include:
- accidental damage cover: protecting you against costly accidents such as smashing a window
- legal expenses cover: covering personal legal expenses
- loss or theft of keys cover: covering costs associated with replacing keys and locks in your home
- home emergency cover: protecting you against emergencies such as a burst water pipe or faulty electrics
- alternative accommodation: covering the cost of staying elsewhere while your home is being repaired.
Should I take out buildings insurance through my mortgage provider?
Buildings insurance is likely to be a condition of your mortgage offer. But that doesn’t mean you have to buy a policy with your lender’s preferred insurer. Instead, shop around and compare deals online to find the right level of cover at the best price.
How much buildings insurance do I need?
When buying buildings insurance you’ll need to calculate the ‘rebuild’ cost of your home – how much it would cost to replace if it were completely destroyed.
This is known as the ‘sum insured’. In parts of the country where property prices are high, the rebuild cost may be lower than your home’s sale price or market value. And the opposite may be true where property prices are relatively low.
The rebuild cost should include the price of labour and materials, as well as any professional fees associated with rebuilding and the cost of clearing the site.
It’s important to be as accurate as possible when calculating the rebuild cost to make sure you’re not over- or underinsured. The most accurate way to do this is to get your home surveyed by a professional. This is particularly important if you live in a listed building as its rebuild cost may actually be higher than its market value.
Alternatively, you can use the Building Cost Information Service’s house rebuilding cost calculator.
Some insurance companies may suggest an amount to you based on their accumulated knowledge of the properties in your area and the details you provide. But it’s always worth checking yourself.
How can I save money on buildings insurance?
How much you pay for cover will depend on a range of factors such as the size of your property, its proximity to water (a stream or river, lake or reservoir, or the sea), and the materials used to build your home. However, there are several steps you can take to reduce the size of your premiums:
- Shop around
First, and most importantly, always shop around and compare cover options carefully. Running several different quotes will help you to find the right level of cover at the most competitive price. Do this each time your buildings insurance is up for renewal to ensure you continue to pay the best possible price.
- Combine your buildings insurance and contents insurance
If you’re buying both buildings and contents insurance, it’s generally cheaper to combine them under the one policy rather than take out separate cover.
- Pay annually, not monthly
Paying for your buildings insurance upfront each year will be cheaper than paying in monthly instalments when interest is often added. If you can’t afford to pay in one go, consider using a 0% purchase credit card to spread the cost over several months interest-free (don’t spread the cost beyond 12 months as you may end up paying for two policies at once – the old and the new).
- Consider optional extras carefully
When comparing insurance policies, only select the optional extras you’re likely to need.
- Increase your voluntary excess
An easy way to reduce your premiums is to increase your voluntary excess. This is the amount you’ll need to pay if you make a claim and the higher it is, the lower your premiums will be. Just make sure it’s still affordable.
- Build your no claims discount
Many home insurance providers will offer a discount to those who have not made a claim on their insurance for a number of years. The longer you go without claiming, the more you’ll save.
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