Buildings insurance
In this article we explore the basics of what you can expect your buildings insurance policy to cover.
These policies vary depending on the provider. But generally their purpose is to protect you from the costs of repairing the structure of your property, or even the costs of rebuilding it completely after any lasting damage.
Buildings insurance cover does not extend to the items inside the home, such as furniture and personal belongings. You will need to have a separate contents insurance policy to get maximum protection.
What is buildings insurance?
Buildings insurance is there to cover you financially in the event that something happens to your home.
It can protect you from the costs incurred through damage from fire or floods, external factors like adverse weather conditions or vandalism, or damage inflicted by internal incidents, like faulty electrics or leaky pipes. It applies to the structural aspects of the building, such as the roof, and any fixtures or fittings, such as a fitted kitchen or bathroom.
Most mortgage lenders will require you to have buildings insurance, given that you are legally responsible for the building once you exchange contracts. If you own your property outright, buildings insurance can still protect your investment from any damage that may occur.
- Fire, explosion, storms, floods, earthquakes
- Theft and vandalism
- Frozen and burst pipes
- Fallen trees, lampposts, aerials or satellite dishes
- Subsidence
- Vehicle collision
- Oil leaking from a heating system.
Buildings insurance extends to all physical structures of your home, such as the walls and roof. Some policies may cover additional features outside the property; for example, driveways, garages or the fencing and walls surrounding your home.
What is not covered by buildings insurance?
Policy exclusions
Depending on your provider, every policy will have a list of circumstances that cannot be claimed for, referred to as ‘policy exclusions’.
While these vary between providers, buildings insurance typically does not cover:
- General wear and tear of your property
- Poor maintenance and/or negligence of the building
- Damage caused by pests (such as birds, mice or insects)
- Frost damage to outside brickwork and pipes
- Deliberate damage caused to the building by you or anyone else residing at the property.
To protect yourself from surprise costs, it’s important to check your policy exclusions, and maintain your property to avoid damage which falls into those categories.
Contents insurance
Buildings insurance does not cover any internal possessions, such as furniture, personal belongings and gadgets. This will need to be purchased through separate contents insurance.
This content is provided for information purposes only and does not constitute any advice or recommendation, whether about any insurance product or otherwise.
How much does buildings insurance cost and how much do you need?
How much does buildings insurance cost?
The cost of buildings insurance can differ, depending on certain variables.
When calculating a quote, insurance providers may look at:
- The age of the property – older properties tend to cost more to insure
- The type of property – larger properties tend to cost more to insure than smaller properties
- The number of bedrooms the property contains – properties with more bedrooms tend to cost more to insure
- The area the property is situated in – properties in areas with a higher crime rate or risk of natural disasters such as flooding or land erosion tend to cost more to insure
- Whether you’ve made a claim on your buildings insurance policy before – if you’ve done so, it tends to cost more to insure.
How much building insurance cover do you need?
It can be a good idea to consider taking out a policy that covers the amount it would cost to completely rebuild your home. This is also referred to as the ‘sum insured’.
The cost of rebuilding your home from scratch is typically less than the price you paid for the property initially, or how much it’s worth currently, as it does not include the land’s value. To get a clearer idea of how much your home would cost to rebuild and whether you need this level of insurance, you can use the Association of British Insurers’ (ABI) cost calculator.
Some insurers may estimate the cost based on the number of bedrooms at your property, while others offer an unlimited value. It’s always worth checking each provider’s policy before making your decision, based on your circumstances.
Most policies adjust over time to reflect the fluctuating prices of the market, but it’s important to check your coverage when renewing your insurance policy, to confirm your building is adequately protected.
Sum insured insurance
This type of buildings insurance is calculated by factoring in the cost of rebuilding your property from scratch, in case it is ever completely destroyed by a devastating event, such as a fire or flood.
The cost to rebuild is typically lower than the current market value of your property, or what you paid for it originally. But the cost to rebuild your property will rise over time, so it’s always a good idea to check your insurance policy each time you renew your cover, to make sure your policy still covers the full cost.
Bedroom rated insurance
This type of buildings insurance in the UK takes into account the cost of rebuilding your home based on the number of bedrooms the property contains. This insurance offers a very high level of cover, and is designed to protect the homeowner from under-insuring their property. However, it’s always worth checking you’re not over-insuring with this type of cover and paying for more than is necessary.
Do you need buildings insurance?
While it’s not a legal requirement to have buildings insurance, it’s always a good idea to protect your investments – particularly one as costly as a home.
If you’re purchasing a property with a mortgage, most mortgage providers will require you to have buildings insurance before you exchange contracts and that this insurance is maintained for the duration of the mortgage. This is because, when you buy your home, you are legally responsible for it, and the costs associated with repairing it, and mortgage providers will require that their mortgage security, being the property, is fully covered in the event of any damage to it or destruction.
If you are buying your home outright, it’s still an excellent idea to protect your property with buildings insurance. Unforeseen circumstances such as fires or floods can be devastating, and buildings insurance can protect you from any costs incurred due to this.
If you’re a leaseholder, there’s generally no requirement to purchase buildings insurance, as this will typically be the responsibility of the landlord who owns the freehold.
And if you’re a rental tenant, it’s always the landlord’s job to cover the cost of buildings insurance for any rental property they let out.
Does landlord insurance include buildings insurance?
While it’s always a good idea to compare different policies, landlord insurance typically includes buildings insurance, and protects the property’s external structure against damage along with any built-in elements, such as a fitted kitchen or bathroom. Landlord building insurance often also insures any furnishings owned by the landlord, such as furniture or carpets, but does not insure any property owned by tenants.
Does buildings insurance cover roof repairs?
Buildings insurance, as standard, will usually include the cost of repairs to your roof in the event of damage caused by floods, storms or other adverse weather conditions. However, if there is no external damage to the roof, and the repairs are required due to general wear and tear or poor maintenance, it is unlikely to be covered by buildings insurance.
Does buildings insurance cover leaks?
Typically, most buildings insurance providers will cover the cost of water damage to the property incurred by leaks. This can be due to faulty or burst pipes, extreme weather conditions like storms or floods, or frost damage to internal pipes. It’s worth noting that any personal items damaged due to leaks, such as electronic goods like television sets, may not be covered under buildings insurance alone.
Do you need buildings insurance on a new build?
New builds are usually classed as a property that has been constructed within the last two years, and has never been lived in. While many new builds often come with a warranty, it’s always a good idea to take out your own buildings insurance policy to make sure you have more complete coverage. Most mortgage providers will usually require you to take out insurance before the exchange in contracts is made.
Does buildings insurance cover subsidence?
Subsidence is when the land around your property sinks. Most insurance providers will typically cover the costs of damage caused by subsidence as long as the property has not been affected by it in the past. But this can depend on the policy.
If your property is built on land that is regularly exposed to subsidence, many lenders may refuse to offer cover. This is due to the high expenses that can often occur when repairing homes damaged by subsidence. You may be required to take out a specialist policy.
Are conservatories covered by buildings insurance?
If you have an existing conservatory, this will likely be included as part of your buildings insurance, as they are classed by many providers as part of the property. It may be worth checking with your provider, as some insurance policies may also include protection of other outdoor structures, such as greenhouses, garages and sheds.
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LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Financial Services Limited and LV= and LV= Liverpool Victoria are trading styles of the Liverpool Victoria General Insurance Group of companies. Liverpool Victoria Insurance Company Limited, registered in England and Wales number: 3232514 is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, register number: 202965. Registered address: 57 Ladymead, Guildford, Surrey, GU1 1DB. Tel. 0330 1239970.
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