Buildings Insurance

What is Buildings Insurance? An In-Depth Review

Buildings insurance, sometimes referred to as home insurance or property insurance, is an insurance policy that protects the structure of your home as well as any permanent fixtures or fittings should any type of damage or loss occur. While building insurance is not required by law for homeowners in most countries, it provides vital financial protection and peace of mind against unexpected repair or rebuilding costs resulting from incidents like fires, floods, storms, or other insured perils.

In this in-depth review, we’ll explore what buildings insurance covers, different policy types and options available, how to calculate the right amount of coverage, factors that influence premium costs, claims processes, and tips for shopping around to get the best buildings insurance deal. By the end, you’ll have a comprehensive understanding of what buildings insurance entails and how it can safeguard your most valuable asset – your home.

What Does Building Insurance Cover?

The core function of building insurance is to cover costs relating to damage inflicted on the structure of your home. This includes:

  • Rebuild or repair damage to the main structure of your home, like walls, roof, and foundations.
  • Fixing or replacing permanently installed fixtures like windows, doors, kitchens, and bathrooms.
  • Removal of debris and demolition work following a covered loss.
  • Additional costs of meeting current building regulations when repairing or rebuilding your home. For example, additional insulation required to meet updated energy efficiency standards.

However, most comprehensive building insurance policies also provide coverage for:

  • Damage to outbuildings and structures includes detached garages, sheds, gates, and fences.
  • Accidental damage – Covers one-off accidents and mishaps like burst pipes, falling TVs, or children accidentally putting a ball through a window.
  • Property owner’s liability – Protects against liability claims and legal costs if someone is accidentally injured in or around your home or suffers illness from hazards on your property. The limit is typically £1-5 million.
  • Alternative accommodation – If your home is uninhabitable due to a covered loss, this benefit pays for comparable temporary housing while repairs are underway.

Buildings insurance generally does not cover the following:

  • Wear and tear or gradual damage from sunlight, rain, winds or condensation over time.
  • Internal decoration like carpets, wallpaper, or paintwork unless part of a larger claim.
  • Damage from poor maintenance or upkeep of your property.
  • Loss or theft of personal possessions – You need contents or personal possessions insurance for these items.

Types of Buildings Insurance Policies

There are different types of building insurance policies tailored for different needs and budgets:

  • Comprehensive policy – As explained above, this provides the broadest cover for structural damage and additional risks like accidental damage and liability claims. It is the most commonly chosen option.
  • Named perils policy – Only covers specific ‘named’ risks like fire, lightning, explosion, earthquake, flood etc. Does not include accidental damage or all risks. Generally cheaper than comprehensive policies.
  • Buildings-only policy – As the name suggests, it only ensures the building structure without extra benefits. The most basic type of policy.
  • Extension options – Many insurers offer add-on extensions to enhance cover like accidental damage, subsidence cover, trace and access (if hidden plumbing/wirings need accessing).
  • Multi-property policy – For landlords, it covers multiple properties in one discounted policy rather than separate policies.
  • Self-catering let property – Specialist policies for insurance when renting out your home as a holiday or short-term let.
  • Listed building policy – Provides tailored cover for buildings with historical/heritage protection and stricter rebuilding conditions.

If possible, it’s worthwhile considering an extensive policy with extras for added security and peace of mind. But always compare options, considering your needs and budget.

Calculating Adequate Building Sum Insured

The ‘sum insured’ or ‘buildings sum insured’ is the maximum amount the insurer will pay out if your property is destroyed or damaged. Getting this right is crucial so you don’t face financial shortfalls if making a significant claim.

To calculate the accurate sum insured, specialists recommend estimating the full rebuilding cost of your home, which includes:

  • Construction materials and labor to rebuild your property to its current specification. Get professional quotes if needed.
  • Demolition costs and clearing debris.
  • Local authority planning and building regulation fees.
  • Architects and surveyors fees to design rebuilt homes.
  • Temporary accommodation is equivalent to your home during the rebuild.

You should also add 10-15% on top to account for rising build costs over the policy period due to inflation. Review and adjust your sum insured annual as property values change.

Let insurance providers know about significant property improvements like extensions as these increase the rebuild cost and sum insured required. Failing to set an adequate sum insured could hamper your ability to restore your home fully after a major claim.

Factors Impacting Buildings Insurance Premiums

Understanding what influences your insurance premium amount is key. Here are the main premium pricing factors:

  • Location – Rural areas with lower crime rates are cheaper to insure than urban neighborhoods with higher claim risks. Coastal zones face bigger flood/storm premiums.
  • Property age and type – Older properties and thatched/listed buildings need special policies and cost more. Apartments are lower risk than detached homes.
  • Construction materials – Flooding risks are lower for properties built from stone/brick over wood.
  • Claims history – No previous claims mean new customers get preferential rates, while multiple claims push prices up.
  • Value of property – Higher rebuild costs need larger sums insured which increases premium costs.
  • Security – Monitored alarms qualify for discounts versus those without adequate security.
  • Excess amount – Higher optional excesses above default levels lower annual premium costs.

Getting regular home improvements and maintaining good property security can gradually reduce insurance costs over time. Online quotes allow multiple insurers to be compared and factored in in individual circumstances.

Making a Buildings Insurance Claim

Should damage occur, here’s a quick overview of making a building insurance claim:

  • Contact your insurer as soon as possible ideally within 7 days of the event by phone or online. Provide basic details.
  • The insurer may send out a loss adjuster to assess the damage, get repair quotes, and finalize the settlement.
  • You are responsible for securing the property to prevent further damage, like covering broken roofs or boarding windows.
  • Get alternative accommodation organized promptly if the home is uninhabitable. Keep receipts for reimbursement.
  • Provide photos of damage if requested as supporting evidence for faster claims processing.
  • Claim payments are made either directly to you or to contractors carrying out repair work with your authorization.
  • Watch for repair progress to ensure high standards are maintained before final settlement.

Thorough documentation streamlines settlements. Don’t admit liability, begin repairs, or dispose of evidence without consent, as this can void cover. An open and cooperative approach helps with smoother resolutions.

Tips For Finding Competitive Buildings Insurance

With plenty of options in the market, it pays to shop around every 2-3 years for a quality policy offering value for money. Here are some pointers:

  • Get a minimum of 3 quotes at once from insurers, price comparison sites, brokers, or directly with providers.
  • Consider options from big insurers and specialist providers who understand your building type.
  • Check reviews online to gauge customer satisfaction levels for different insurers.
  • Always state complete details accurately to receive accurate like-for-like quotes.
  • Look out for bundled home insurance discounts when adding buildings and contents together.
  • Consider increasing excesses in return for lower premiums if the financial situation allows for absorbing some losses.
  • Explore multi-policy and loyalty discounts if insuring other assets, too, like cars and life insurance.
  • Reassess covers as needs change with life stages like children moving out or property renovations.

The internet and price comparison sites improve transparency, making the shopping process easier than ever. Commit to annual reviews to optimize costs over the long term.

In Summary

Buildings insurance provides peace of mind against potential heavy rebuilding expenses after disasters by covering structural property damage. Comprehensive policies offer the best overall protection with the widest range of standards and additional benefits.

Careful consideration of individual requirements alongside regular market research helps determine suitable coverage types and opt for competitive premium rates. Well-documented claims procedures further facilitate straightforward resolutions when needed most.

Overall, buildings insurance forms a prudent long-term investment for homeowners seeking financial protection of their greatest family asset – the home. With prudent planning and reviews, it delivers certainty through unpredictable times at cost-effective rates.