Buildings insurance

What is buildings insurance?

Buildings insurance is a type of home insurance policy which protects the physical structure of your home against risks like fire, flooding and theft.

Should your home be damaged or destroyed the insurer will pay for any repair or rebuilding work that needs doing.

What is the difference between buildings insurance and contents insurance?

Buildings insurance is totally different from the other main type of home insurance – contents insurance. While buildings cover will protect the bricks and mortar of your property, you’ll need contents cover if you want to protect any possessions inside.

What does buildings insurance cover?

Buildings insurance will typically cover any repair or rebuilding costs should it be damaged or destroyed by one of the following:

• Fire, smoke and explosions
• Storms and flood
• Subsidence
• Vandalism
• Falling trees
• Vehicle collisions
• Water damage from a burst or leaking pipe
• Oil leaking from a heating system

What buildings insurance doesn’t cover

As with all types of insurance, there are reasons the insurer will refuse to pay out. Generally damage caused to your home by the following won’t be covered:

• Wear and tear
• Vermin and pests
• Leaking gutters
• Frost

Who is buildings insurance for?

In a nutshell, buildings insurance is for property owners and landlords – if you own the freehold to the property.

You don’t need this type of protection if you’re just a tenant who is renting the place.

Ultimately buildings insurance isn’t legally required. However, if you have (or are planning on taking out) a mortgage, the lender will most likely demand you take out buildings insurance.

Likewise, if you own a flat you might have to take out cover as part of a leasehold agreement.

How much is buildings insurance?

The annual cost of buildings insurance really varies and depends on a whole host of factors:

• Your claims history. If you’ve made several home insurance claims over the past few years you’ll probably be hit with higher premiums.
• Your profession. Insurers view certain jobs as being higher risk. If you’re a self-employed musician and you store your expensive instruments at home, this could mean higher premiums.
• Your lifestyle. Insurers see smokers as being higher risk, as there’s more chance your home will catch fire.
• Address. Insurers will use the location of your home as one main factor when calculating your costs. If your home is in an area with a high crime rate or a high flood risk, you’ll pay more.
• Building materials. Homes with wood features like timber frames are seen as higher fire risks and will drive insurance prices up.
• Security features. If your home has security features such as a burglar alarm you’ll pay less in insurance.
• Your level of cover. Homes with higher estimated rebuild values will invariably have higher insurance costs. After all, it’s the insurer who is going to have to foot the bill for any damage.

What can I do to bring down my premiums?

Feel like you’re paying too much in insurance premiums? Here’s how you can reduce costs:

• Accurate rebuild estimate. Don’t pay more in insurance than you need to. By using a commissioned survey’s valuation or the Association of British Insurers’ calculator, you can make sure you get a near precise rebuild value estimate, which means you won’t pay more than you need to for insurance.
• Try paying annually. Insurers tend to charge customers more when they pay in monthly instalments so try to pay for your buildings cover in annual lump-sums.
• Opt for a higher excess. Your excess is the amount you’ll have to pay towards a claim before the insurer starts helping out financially. By agreeing to pay a higher excess the provider could slash your premiums.
• Never auto-renew. Shop around each year when your policy is nearing its end date. You could find a better deal elsewhere as insurers often don’t reward loyalty.
• Build a no claims discount. While it’s impossible to not claim in certain circumstances, by refraining from claiming for small repairs you can build towards a no claims discount after a few years.
• Install alarms. Fitting burglar and smoke alarms in your property can cut insurance costs, but make sure they’re approved models before buying.

Frequently asked questions

• What's the difference between rebuild value and market value?

  The rebuild value of your home is the amount it would cost to entirely rebuild your home, were it to be completely knocked down for example.

  This means you’ll want a policy that covers expenses like materials, labour and architects.

  Of course it might seem incredibly difficult working out the rebuild value. Thankfully though, you can use the Association of British Insurers’ calculator, or commission a survey on the property.

• How can I switch from my home insurance provider?

  Wait until your policy is a month or so from its renewal date, then shop around and use comparison sites to see what policies are out there.

  Look at the features they offer, watch out for any limits and exclusions, and try to find a deal that is affordable but covers your property and contents sufficiently.

  Should you find a better deal you can apply online or over the phone.

• I'm going away for an extended holiday – do I need to tell my insurer?

  It depends on the length of your holiday. Insurers generally won’t cover you for more than 30 to 60 consecutive days away. The provider might agree to you going slightly over your time away limit if you call and ask, if not you can arrange an unoccupied home insurance deal.