When to get building insurance when buying a home
It can be one of the most important policies to consider when you are buying property for the first time, but when is the right time to take out buildings insurance?
Key takeaways
Buildings insurance financially covers damage to the property’s structure from risks like fire, flooding, storms, vandalism, and subsidence
It usually covers main building, fixtures, fittings, outbuildings, garages, fences, and boundary walls
While buildings insurance is not a legal requirement it is often required by lenders to protect their investment
Buildings insurance is typically needed when you become legally responsible for the property and is not advisable to wait until you move in due to potential incidents between exchange and move-in
What does building insurance cover?
Building insurance in the UK typically covers the structure of your property against damage from various risks, such as fire, flooding, storms, vandalism, and subsidence.
It usually includes the main building, as well as fixtures and fittings, such as kitchens and bathrooms.
One easy way of thinking about it is to imagine if you tipped your house upside down and then righted it again.
Anything that stays in place is likely covered by buildings insurance. And anything that shakes out would be contents and, depending on its value, may need to be covered by contents insurance.
It might not just be the main property that is insured. Policies may also cover outbuildings, garages, fences, and boundary walls.
Additionally, it often includes liability protection in case someone is injured on your property.
As well as paying to fix your property, depending on the policy, you might also have the cost of temporary accommodation covered while the repairs are being made.
However, coverage specifics vary between policies, so review the terms carefully to ensure you have adequate protection in place.
Why do I need to have building insurance?
Buildings insurance is essential for several reasons, including:
It provides financial protection in case your property suffers damage from events such as fire, floods, or vandalism. Without insurance, the cost of rebuilding your home could be overwhelming, potentially leaving you without a place to live.
Many mortgage lenders require buildings insurance as a condition of the loan. This is because they want to safeguard their investment in your property.
Buildings insurance typically includes public liability coverage, which protects you financially if someone is injured on your property. In the unfortunate event of a severe injury or fatality, the payout could be substantial, potentially far exceeding your personal assets.
Buildings insurance offers peace of mind and financial protection against unforeseen events that could otherwise have devastating consequences.
When do I need to have buildings insurance in place?
In the UK, it's typically necessary to have buildings insurance in place when you exchange contracts - and become legally responsible for the property - during the process of buying a home.
While buildings insurance is not a legal requirement, most mortgage lenders insist that you have buildings insurance as a condition of the loan.
As such, you'll need to arrange for a policy to be in effect by the exchange of contracts stage to ensure the smooth progression of your mortgage application.
Without insurance, you could be exposed to significant financial risk if the property suffers damage before the sale is finalised. Additionally, having insurance in place protects the lender's investment in the property.
Start researching and arranging buildings insurance as soon as you have a confirmed offer accepted on a property.
This ensures that you have adequate coverage in place by the time you exchange contracts.
Can I wait until I move to get building insurance?
While buildings insurance is not a legal requirement, you will not be able to move in without it if it is a condition of your mortgage.
On the rare occasion that the mortgage company does not insist on having buildings insurance in place, or you are purchasing the home without taking out a mortgage, you can wait until you move before taking out a policy.
However, this is probably unwise given the risk of an event happening between exchanging contracts - when you take legal ownership of the property - and moving in.
Consider that costly incidents can occur with properties when they are vacated or even be caused during the moving processes when the previous owners leave or you arrive.
Given the relatively low cost of building insurance, it’s worth thinking about whether this is a risk you want to take.
Is building insurance a legal requirement?
Building insurance is not a legal requirement in the UK. However, it's highly advisable to have it in place to protect your property from unforeseen events like fire, floods, or vandalism.
Additionally, many mortgage lenders require it as a condition of the loan to safeguard their investment.
While not mandatory, having building insurance offers essential financial protection and peace of mind for homeowners.
What’s the best way to pay for buildings insurance?
Buildings insurance can be cheaper if you pay upfront and annually rather than by monthly direct debit, but compare the costs of your policy before you make the decision.
Should I add accidental damage to my buildings insurance?
Adding an accidental damage policy can be a useful addition to buildings insurance as an extra level of cover.
Accidental damage includes things such as smashed windows, cracked wall tiles, damaged locks and holes created in walls by accident.
Our guide provides more information on this additional cover.
What other policies can I add on to my buildings insurance?
You’ll often be given the opportunity to purchase add-ins such as:
Legal cover. Financial help up to a certain amount when you need to involve the court in a dispute or incident, or if you need to be defended in court yourself
Home emergency. Pays for short-term damage repairs until your provider can arrange for full repairs to be made, such as weather-proofing the exterior of a damaged property until permanent building work can start
Should I cancel buildings insurance for a home I’m selling when I exchange contracts?
It's generally advised not to cancel buildings insurance until the sale is completed and ownership is transferred.
Even after exchanging contracts, unforeseen events can occur, and you want to ensure coverage until the deal is finalised.
Discuss with your insurer about any adjustments needed, but maintain coverage until the sale concludes to avoid potential liabilities.
More useful guides
Our selection of guides can give you more information on home, buildings and contents insurance
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