When you take out a mortgage to buy a home, your lender will insist that you take out suitable buildings insurance too.
They may refer to it as home insurance, but this usually covers two different types: buildings and contents.
Buildings insurance protects the fixtures and structure of your home in the event of damage. Usually, you will be covered for the cost of repairing or rebuilding what has been broken or destroyed.
Where contents insurance protects your personal belongings, electronics, furniture and some fittings like carpets, buildings insurance is there to protect the things that are there permanently.
This means you can expect the insurance to cover things like:
- Fitted kitchens - The doors and windows
- The floors and ceilings - The roof
- Fitted bathrooms - Built-in cupboards
Depending on your insurance provider, your cover may extend to things like your garage, driveway, and any outer walls or fences you have.
So, this policy is there mainly to help cover the cost of rebuilding or repairing your actual property in the event of serious damage, rather than the cost of the things you own.
You must have buildings insurance if you’re taking out a mortgage, but you don’t strictly need contents insurance. It’s still a smart move to take out a contents insurance policy though, as this protects your belongings should the worst happen.
What am I covered for?
Generally, buildings insurance will cover you against criminal and natural damage to your home’s structure and fittings. Just what you’re covered for will depend on the insurer you go with, so it’s worth checking what you’re covered for first.
You can usually expect to have cover for:
- Flood and storm damage -Vandalism
- Subsidence - Falling trees
- Water damage - Fire and smoke damage
- Explosions - Vehicles crashing into the property
- Earthquakes - Burst pipes
If you have to claim, you should get the money you need to rebuild what is broken in full.
What’s not covered?
When you take out your policy, it’s important to read through the terms and find out what you will and won’t be covered for. Different policies will list things you can’t claim for, so it’s good to clue yourself up on this before you take a policy out.
Your home won’t be protected from general wear and tear, as this kind of insurance is just for sudden and unexpected damage. Other issues like leaking gutters and infestations from pests like bugs and mice usually aren’t covered.
You’ll have to take out what is called a “non-standard” insurance policy if you have certain unusual features in your home. Things like thatched or glass roofs, and if your home is self-built or listed, usually need an extra level of cover – which will cost you more.
It’s also worth keeping in mind that if you’ve been living elsewhere for a certain length of time when the damage occurs, your insurance provider may refuse to pay out. Often this length of time is around one or two months, but it depends on your insurer, so check your policy if you are planning an extended trip away.
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