A first time buyer guide to buildings insurance

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There are a lot of costs to consider when buying your first home, but buildings insurance is one you can’t ignore.

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Your mortgage lender will insist you have buildings insurance before it gives you your loan. Find out everything you need to know with our guide.

Do you need buildings insurance?

You have probably purchased contents insurance in the past, but buildings insurance will mostly be a new phenomenon if you’re a first-time buyer.

Buildings insurance covers everything that is a fixed part of the house — essentially the bricks and mortar. It includes the walls, roof, doors, floors, windows, pipes, kitchen cupboards and the bathroom suite. Contents insurance covers your possessions within the home.

If your new home has any type of outbuilding, like a shed or garage, make sure to check that your policy covers a rebuild in case it is destroyed.

Buildings insurance is not a legal requirement, but almost all mortgage lenders will insist you take out a policy before they give you a loan. This protects their investment until the mortgage has been paid off and you own your home outright.

Your cover should be in place when you exchange contracts, as this is the point you become legally obliged to buy the property.

If you buy your home outright, without a mortgage, you won’t be required to buy buildings insurance, but it is still a sensible investment. Bills for repairing homes damaged by events like fire and flood can be huge and you may not be able to afford them without buildings insurance in place.

Leasehold properties

If your new home is leasehold, you may need buildings insurance for the parts you are responsible for. Check your lease documents to find out.

Communal areas of the property will likely be covered by the freeholder’s buildings insurance. It can be a good idea to ask for a copy of their policy, as it may be required by your mortgage provider.

How much should you insure your home for?

You should insure your home for the amount it would cost to rebuild (“sum insured”) including clearing the land and architect fees, not the amount you bought it for or its current market value.

If it is damaged or destroyed in an accident your buildings insurance will cover the cost of rebuilding or repairs, not the cost of purchasing a new home.

House prices vary significantly depending on their location, whereas building costs such as labour and raw materials are far more consistent.

Use an online calculator to make sure that the “sum insured” on your policy is the amount you will need to rebuild your home, as being under insured could cost you thousands.

Where should you buy buildings insurance?

Homeowners are free to buy buildings cover from any insurer, though in the past it was a requirement to make the purchase through your mortgage provider.

Your mortgage provider will likely still offer you an option to purchase buildings insurance, but comparing buildings cover can help you find a cheaper deal.

It’s usually cheaper to buy home and contents cover from the same insurer in a combined policy.

How much does buildings insurance cost?

This depends on the size, age and location of your home. Different providers will offer you different quotes, so it is important to compare buildings cover across the market to find the best price.

Local crime rates, a history of flooding and building materials can all have a huge impact on your premiums.

The cost also depends on the level of cover you purchase. Optional extras can increase your premiums, but may also provide important additional cover.

What type of cover do you need?

Basic buildings insurance will usually protect you against damage caused by weather, leaks, fire and smoke, subsidence, theft, falling trees and frost damage. Make sure to check your policy documents to find out exactly what is included in your cover.

In addition, most insurers will offer extra cover, including for:

  • Accidental damage to your home, for example, if you smash a window or spill paint on a carpet.

  • Home emergency cover, which allows you to call for emergency help if you have a burst pipe or electrical issue. You can find out more about what home emergency cover offers here.

  • Personal possessions cover. This protects your belongings when they are outside your home. Most policies cover items like jewellery and mobile phones anywhere in the UK and abroad.

  • Legal expenses cover protects you from legal costs for things like property disputes or faulty goods or services claims. Most insurers also offer a 24-hour legal advice line you can use for guidance.

These extras usually come at an added cost and are unlikely to be deemed essential by your mortgage provider. Think carefully about whether they would be useful, as they could save you money and hassle in the long run.

Making a claim on buildings insurance

There are 3 basic steps to take when claiming on your buildings insurance:

  • Report any crime to the police — for example, if you have been burgled — and take a note of the incident number they give you.

  • Call your insurer on their claims line, which will be listed on your policy document. Most operate 24 hours a day, and you will need your policy number to hand.

  • Tell them about your claim, including as much information as possible and details of any damage or loss.

Find out more by reading our how to claim on your home insurance policy guide.

Simple claims can often be solved quickly, with your payout paid within a couple of days.

Renewing buildings insurance

There are lots of ways to cut the cost of your buildings insurance when the time comes to renew your policy, but the most important thing to remember is to notify your insurer of any changes to your home.

Renewing an existing policy without telling your insurer about your new extension could cost you thousands if you need to claim. Remember, even if your provider offers you a reduced premium, there may still be better deals out there so always shop around before you renew.

What other insurance do you need?

Buildings insurance may be the only type of policy required by your mortgage lender, but there are other important forms of cover to consider as a first-time buyer.

  • Life insurance can pay off the outstanding balance of your mortgage if you die, meaning your loved ones will not be left with the debt.

  • Mortgage protection insurance will cover your mortgage repayments if you are unable to work due to illness.

  • Homebuyer protection insurance can cover some of your upfront costs, such as valuation fees, if your purchase falls through.

  • Contents insurance to protect your possessions from damage or theft

Protect your home and belongings for less by comparing home insurance policies to cover a range of property types and individual circumstances.

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