When buying a new house you will find that your mortgage lender will recommend that you take out buildings home insurance cover and may in many cases attempt to sell you an insurance policy. In such cases it is important to remember that you are under no obligation to take this cover and that you may be better off looking at what other companies can offer you, so you should definitely compare their offer with the vast number of other insurance companies that are available. If you own a flat then you will most likely find that the freeholder will arrange insurance, and if your home is rented then the owner of the property will arrange the cover.
A good buildings insurance policy will cover funds so that you are able to rebuild your home should it be destroyed or damaged to such an extent that this is deemed necessary. The amount of cover that you get will be equivalent to the cost needed to rebuild your home, commonly referred to as the ‘sum insured’. This value is the most that your insurer will pay out and it may be more or less then the market value of the property.
Some insurance companies will offer you unlimited cover, whilst others may offer premiums based on a simple assessment of where you live and the type, size and age of your property. It goes without saying that if you live in a subsidence prone zone you’re your premiums are going to be higher. The majority of policies have an excess which is typically between £50 and £100, which you will be required to meet on any claim that you make. Your policy will most likely be kept up to date by index-linking your sum insured to take into account any changes that may take place in rebuilding costs.
It is worth checking that the insurance company does and you should make sure that you tell your insurer should you make any improvements to the house. Your policy may also offer you alternative accommodation should the need arise. Please make sure that you do not choose the cheapest building insurance but make sure that it meets all your requirements.
Depending on where you get your buildings home insurance from, you will find that some may only cover the market value. A good insurance policy will also sometimes be able to offer you cover against any damage that should result from an event that is out of your hands such as flooding, fire and subsidence, and also damage caused by theft, storms and vandalism. Accidental damage that can occur to any underground pipes and cables or glass in doors or windows is also often covered.
However, you may find that any damage resulting from a DIY accident may or may not be covered, so if you know you will be doing a lot of DIY you may want to think about including this or checking that your existing policy will cover you for this. Of course, as with all types of insurance there will be some exclusion so be aware that these can include storm damage to gates and fences and frost damage.
David Thomson is Chief Executive of BestDealInsurance an independent specialist broker dedicated to providing their clients with the best insurance deal on their home insurance, car and life insurance.
