Buildings insurance is taken out to cover the cost of repairs that may need to be carried out on your home if it is damaged.
This repair work covered by buildings insurance can include structural elements such as the roof, windows and walls. It can also be used towards repairs on fixtures and fittings such as baths and kitchen appliances.
As well as paying for repair work, it can cover the cost of demolition, site clearance and fees from architects.
Buildings insurance will not cover damage to belongings - for this you need contents insurance
What damage does it cover?
It is important to remember that most buildings insurance will only cover damage to the property that is out of your control. The typical causes of damage that buildings insurance will cover are:
- Falling objects (e.g. trees, lampposts)
- Vehicle collisions
Remember that different insurance policies might have slightly different rules – for example they may not cover one of these or may cover additional causes of damage. Read through your policy to make sure you know what you’re covered for before signing.
There are some buildings insurance policies that would cover accidental damage to your home, for example if you accidentally hammered a nail into a pipe and burst it. However, this will usually take the form of an optional add-on that will cost extra. The scale of the accidental damage will also determine whether you're covered.
Who needs it?
As buildings insurance covers damages that you cannot anticipate, it is useful for any homeowner to take it out. This way you can prevent the unfortunate scenario of having to spend most of your own income fixing your house due to events that weren’t your fault.
If you have a mortgage you should have got buildings insurance at the same time, as most lenders require it before they accept your application. It should be in place from your date of exchange. It is still advisable to have buildings insurance if you own a house but do not have a mortgage.
If you are in the process of applying for a mortgage
, the lender will likely help you find a building insurer. But remember, you don’t have to use the one they suggest if it is not included in the mortgage package, - it might be worth shopping around. However, if you do choose one yourself, your lender has to approve it.
If you are renting a property you do not need buildings insurance as you do not own the home. Your landlord is liable for any damage that buildings insurance covers. If you are the landlord of a rented property you will need buildings insurance, as again, you own the property and therefore need to protect against any unforeseen damage that it may incur.
If you are buying a Shared Ownership property, you also may not need buildings insurance as it may be covered by the housing association (due to there being a rental element involved).
What will it cost?
Like other insurance policies, such as car insurance, buildings insurance will be paid in instalments. These can be monthly or annually based on the policy you choose.
There is no set pricing for building insurance as it will depend on how much it would cost to rebuild or repair your home, which varies depending on the property’s type, size and age. According to insurance experts Nimble Fins’ research
, the average cost to rebuild a house in the UK is £197,000. However, If your home is bigger than average for example, more materials would be needed and it would take longer, meaning builders would be paid for more hours. This all adds up to increased costs.
This means that over time your cover may contribute to more or fewer repairs based on the changing cost of the work. So, it is a good idea to try and keep up with how much your property would cost to rebuild, to see if your insurance is still offering you sufficient coverage.
Learn more about building insurance costs