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BUILDINGS INSURANCE

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Consumer Intelligence September 2014

Our guide to finding the right buildings insurance policy

Buildings insurance is essential to protect your home from unforeseen circumstances such as fire, flood and the wrath of the elements. It covers the bricks and mortar of your home along with any fixtures and fittings within the property.

Contents insurance, on the other hand, protects the possessions within your home.
While buildings insurance isn't compulsory, if you have a mortgage it is likely to be one of the conditions imposed by your lender. As soon as you buy a house and exchange contracts, you become legally bound and responsible for the property.

If you live in an area at risk of flood, you may need extra cover
If you live in an area at risk of flood, you may need extra cover

It is therefore essential that you ensure you have buildings insurance in place from day one to protect you from potential disasters out of your control.

Along with fires and floods, a good buildings insurance policy will protect your home against storm damage, subsidence, burst pipes and vandalism. Failure to have cover in place could result in you having to pay out thousands for repairs or even being left homeless.

How much should I insure my home for?

It is important that you don't over or under-estimate how much you should insure your home for. You don't want to have to pay a higher premium than you need to, but similarly, it could be disastrous if you needed to put in a claim and then found out you weren't covered.

The amount you insure your property for should be based on the rebuild value, rather than the market value. So, for example, if your home was completely destroyed by fire and you had to start and rebuild it from scratch, how much it would cost.

While this may sound daunting, the good news is that the rebuild cost is usually less than the market value, so this will clearly affect the price of your premium. A surveyor to determine the rebuild cost of your home can be contacted through the Royal Institute of Chartered Surveyors (RICS).
         
When comparing policies, it's important you read the small print to find out exactly what is included. All policies will differ, for example some insurers will include cover for drives and outbuildings, and some will cover the cost of temporary accommodation if your home wasn't suitable to live in following a claim.

Similarly, you will need to decide if you want to pay for additional extras such as legal cover. Clearly it will increase the price of your premium but in the long run it could be worthwhile. You will need to weigh it up and if it gives you peace of mind, it could be worth every penny.

How to get the best deal on your home insurance

  • The most important thing when taking out home insurance is to shop around and not just 'auto-renew' your policy. Insurers rely on apathy so do your research and find out where you can get a better deal. MoneySupermarket's home insurance price comparison tool will let you get quotes from a variety of providers and compare them to ensure you find the best price.
  • Increasing your excess will also help keep costs down. The excess is the portion of the claim that you will have to pay yourself so by opting for to pay more, your overall premium will be decreased. It's important to be realistic though - don't opt for such a high excess that if you had to put in a claim and pay out you wouldn't be able to afford it.
  • Building up a no claims history will also help to keep costs down. Insurers will look favourably on those who have not made a claim over a certain amount of time.
  • It's important to recognise with insurance policies that cheapest isn't always best. You will get what you pay for and skimping on cover could leave you having to find thousands of pounds. What may cost a few pounds extra a month now could save you a huge amount in the future - so choose your policy carefully.