Buildings Insurance?
Everyone wants to make their house a home, and by purchasing building insurance it makes it that much easier to close the curtains at night and to not worry if the storm ahead will ruin your property.
Buildings insurance cover protects the homeowner against the cost of damage to the structure of their home from Mother Nature. This type of insurance is also important if the house is mortgaged. Contents home insurance is optional, but the two insurances are normally bundled because some insurance companies offer discounts when two policies are purchased.
In maisonettes and flats, the apartment is usually insured under a single block policy, which covers the communal aspects such as lifts, hallways and stairs.
Building insurance is purchased by the property owner, so in a leasehold property, it is the freeholder's responsibility to arrange this type of insurance and the cost will be passed onto the leaseholders via a service charge.
WHAT IS COVERED BY BUILDING INSURANCE?
The cost of repairing or rebuilding a property is covered by buildings insurance. The policy will cover the building's structure, including permanent fittings and fixtures such as built in wardrobes and kitchens, bathroom suites and toilets.
It is also possible to extend the cover to outbuildings such as greenhouses and garages. Depending on the terms and conditions, fences, walls, paths and swimming pools can be covered for an extra premium.
It is important to note that the property should be insured for its full rebuilding costs, not the market value of the house. If you underinsure, the insurance company will decrease your claim considerably.
WHAT RISKS ARE COVERED BY BUILDING INSURANCE?
The usual dangers that are covered vary from damage to, and destruction of the house as a result of a flood, fire or storms, to an earthquake or an explosion. It also covers the property from theft and vandalism. Falling trees, impact by vehicles, water leakage from pipes or tanks plus oil leakages are all covered.
Building Insurance may cover alternative residence in the event that the property becomes unlivable and needs to be repaired or rebuilt up to a reasonable level. It also covers replacement glass in windows, skylights or doors.
EXCLUSIONS AND EXCESS UNDER BUILDINGS INSURANCE
Certain losses are not covered by the policy and are only semi reimbursable. The policyholder must meet some of the cost of each claim, which is known as ‘the excess'. This results in keeping the policy premiums down and can deter trivial claims.
The common exclusions of losses are a consequence of sonic bangs, frost damage, war or radioactive contamination from waste or nuclear fuel. Cover against damage caused by acts of terrorism can be added through payment of an additional premium with some policies.
WORKING OUT THE SUM ASSURED
It is possible to commission a ‘rebuilding cost assessment' which is prepared by the Royal Institution of Charted Surveyors. This is recommended if a property has historic or unique features. The sum assured also need to be modified periodically in order to mirror increases in building costs. Some insurance companies will automatically index your cover each year. However, the insurer will be unaware of any improvements; therefore it is important to report them as you could become underinsured if you do not.
With buildings insurance cover you can protect the roof over your head!