Guide to Buildings Insurance

Buildings insurance is an element of home insurance cover which gives you financial cover against unforeseen damage or the destruction of your private property. If you have purchase your home with a mortgage agreement, the lender may require you to take out buildings insurance cover to protect the value of the property - against which they have lent you money.

A standard buildings insurance policy should cover the structural integrity of your home, including permanent fixtures such as bathroom fittings and fitted kitchens. Buildings insurance cover can vary greatly between each provider so you should be checking the extent of cover provided by each buildings insurance policy - you want to know what you're getting for your buildings insurance premium!

How Much Buildings Insurance Cover

When buying a buildings insurance policy, it is important to be aware that - for insurance purposes - the value of the building covered is restricted to the cost of rebuilding, not the current market value of the building. Therefore, the buildings insurance protection should allow the policyholder to restore the property to the same condition as immediately prior to the incident which caused the damage.

To this end, "under insurance" is a common problem with buildings insurance protection. This can occur when a homeowner carries out improvements to their home without informing their buildings insurance provider. The buildings insurer will only pay out on a claim to rebuild the property and return it to its "last known" condition.

Special Risks Buildings Insurance

As with all insurance products, buildings insurance premiums are based on the risks which may trigger the home insurance company to pay out a claim as well as the likely value of that claim. As a result, a buildings insurance provider may refuse cover for buildings with a history of high risks problems such as subsidence or flooding. In these scenarios, a home insurance comparison should be carried out to find the specialist buildings insurance companies for your specific circumstances.

Buildings and Contents Insurance

Most homeowners looking to buy home insurance cover frequently combine their buildings insurance and contents insurance protection into one policy. This combined policy is usually offered with a discount from your buildings insurance company.