Buildings Insurance

If a fire ripped through your home or your roof was badly damaged in a thunderstorm, the repair costs would most likely be expensive - and that's why you need buildings insurance. In fact, if you have a mortgage, a building insurance policy is compulsory.  Owners of leasehold properties, such as a flat, shouldn't have to worry about buildings insurance as it is the freeholder's responsibility.

What does buildings insurance cover?

Buildings insurance covers the structure of your home, not the contents. This includes permanent fixtures and fittings, such as fitted wardrobes and kitchen units. Most policies will also cover any outbuildings, such as a garage, shed or greenhouse.
A good policy will insure your home against a range of risks, including

• Fire, smoke, lightning and explosions
• Storm and flood damage
• Burst pipes and other incidents of water leakage
• Subsidence, heave or landslip
• Vandalism or third party damage
• Falling trees or branches
• Theft or attempted theft
• Leak of oil from the central heating system

If you live in an area at risk of flood or subsidence, you may need extra cover or your insurer might impose a higher 'excess' - the amount you have to pay towards any claim. Your policy might be more expensive as a result, but the extra cost is probably worth the peace of mind.

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The details of the cover will be in the small print of the policy, which you should read carefully. You should also check the small print for any exclusions. Common exclusions from buildings insurance are:

• Damage arising from wear and tear
• War or acts of terrorism
• Frost damage
• Radioactive contamination
• Sonic bangs from aircraft

Always remember to be truthful and to disclose any relevant facts when you apply for home buildings insurance, or you could invalidate any claims. An insurer can also refuse to pay out if you have left the property unoccupied for more than 30 days.

How much buildings insurance do I need?

Your policy needs to cover the amount it would cost to completely rebuild your home. And you need to get the figure right because the 'sum insured' is the maximum the policy will pay out. Remember that the rebuild cost is not the same as the price you paid for your property, or the current value of your home on the open market. In fact, the rebuild cost is quite likely to be less than the current market value, so you could end up paying over the odds if you insure your home for the wrong amount.

Many insurers provide free online calculators to help you work out the rebuild costs of your home. The Association of British Insurers carries some useful information on its website, including an online calculator in association with the Building Cost Information Service (http://abi.bcis.co.uk). If you have just purchased your home the rebuild figure will be given on your Mortgage Valuation.

If your property has special features, such as a thatched roof, or is a listed building, it might be wise to commission a surveyor from the Royal Institute of Chartered Surveyors (RICS) to assess the rebuild costs, though you will have to pay a fee.

A number of insurers offer unlimited cover so you don't have to work out the rebuild costs. However, if you know the figure it might be cheaper to shop around for a policy that fits your exact needs. Some firms also calculate the sum insured based on a simple assessment of where you live, the type and age of the property. But it is up to the customer to check the accuracy of the figure.

It is important to keep the sum insured up-to-date so that you are not left with a shortfall if you have to make a claim. Rebuild costs tend to rise over time; the rebuild value of your property might also increase if you make any changes, such as an extension or loft conversion. Some insurers offer policies that are index linked, so the sum insured automatically moves in line with rebuild costs.

Do I need additional buildings cover?

Most insurers offer extra cover - for an additional premium. Perhaps one of the most common policy add-ons is accidental damage to your home. So, if you go up to the loft and accidentally put your foot through the ceiling, your policy will pay out. A number of insurers will also pay for alternative accommodation - up to a set limit - if you have to temporarily move out of your home in the event of a claim.

You might also want to extend your policy to cover:

• Damage to boundary walls, fences, gates driveways and swimming pools
• Damage to underground pipes, cables, gas and electric
• Glass in windows, doors, conservatories and skylights
• Liability cover - should you damage someone else's property
• Legal expenses cover

If you live in a risk area for flooding or subsidence or your property has special construction features then additional cover may also be required.

Tips for cheaper buildings insurance

There are ways to save money on your buildings insurance policy, though you should never be tempted to skimp on the sum insured.

• Shop around - your mortgage lender will most likely try to sell you buildings insurance, but you can probably buy it cheaper elsewhere. Just be clear about the level of cover you need and make sure that you compare like for like when looking at different insurers. You should also shop around when your policy is due for renewal - don't assume that your existing cover is the top deal. Use our price comparison tool to find the best quote for you.
• Pay your premiums annually - many insurers charge an additional fee if you pay monthly by direct debit. So try to make a one-off payment each year.
• Raise the excess - most insurance policies include an excess, which is the amount you pay towards any claim. If you opt for a higher excess, you can often pay a lower premium.
• Combine buildings with contents insurance - if you need both buildings and contents insurance, it is often cheaper to combine them and buy your policy with the same insurer.
• Prevent claims - insurers will usually reward policyholders who have accrued a period of no claims with a cheaper policy premium. So make sure you take some simple steps to limit claims. Install a burglar alarm, and fit high quality locks and smoke alarms. Insulate pipes and tanks to prevent freezing in cold weather. Seek professional advice if you decide to plant or chop down any trees.