Home Insurance Explained, Buildings Insurance

Buildings insurance is a type of home insurance. If your home is destroyed or made uninhabitable by fire, storm, flood or vandalism then buildings insurance will cover your financial losses.

To get a mortgage you will normally be required to take out buildings insurance to protect the asset on which the loan is based. The level of cover available varies wildly, and typically the cheaper the policy the less will be covered in the event of disaster.

A basic buildings insurance policy ought to cover the structure of your home and should include permanent fixtures such as your bathroom suite and fitted kitchen. Outbuildings like garages, greenhouses and sheds are covered by most policies, but other outside items like plants, fences and boundary walls may not be.

Do be sure that your policy covers the cost of completely rebuilding your house, including any amendments you have made. Make sure that you tell your insurer if you make any significant improvements to your home, for example the building of an extension. Your buildings insurance premium will be calculated based on the condition the insurer knew your home to be in, and any claims you are awarded will be based on this.

If the amount you receive does not cover your financial losses because you have under insured your home, can be an awful financial problem, so carefully consider the level of cover you need and be realistic about any excesses you are prepared to pay. Home insurance prices can vary significantly so do shop around.

A lot of home insurance providers offer discounts if you buy both your buildings and contents insurance from the same company. Contents insurance is for all the items that are not permanent fixtures in your home, such as white goods and furniture. The test is whether you would take the items with you when you moved, for example you would not take the wallpaper but you would take the curtains.

If your home is owned by a landlord, you are not responsible for buying buildings insurance, but do be aware that your own possessions will not be covered by your landlords buildings insurance policy. To insure your own belongings, you should take out a contents insurance policy. There are specialist policies for tenants and shared policy for people who share a rented home.

If your home is perceived to be high risk, for example due to a history of flooding, then your premium is likely to be higher and you may struggle to find an insurer. There are specialist buildings insurance companies who deal with high risk properties, so if your home is in that category you may need to look at their products and brace yourself for a bigger bill.