Buildings Insurance Cover UK

Whilst you can cover the loss of your possessions through contents insurance cover, it will not cover the value of your property and the fittings within the property that could not be removed. You need separate insurance cover for the damage to the structure and fittings, and this is called buildings insurance cover.

You are not actually insuring your home for its market value. The rebuilding cost needs to be covered. This could be less than the property's market value or it could be more.

To work this out, you will need to ask your insurance company to help you. They may have a conversion table to aid you in estimating the costs of rebuilding, which can indicate the level of insurance that your require. You are unlikely to be qualified to work it out by yourself. But, if you are living in a listed building or another type of valuable property, you would be well advised to ask for a professional valuation first.

Your buildings cover enables you to claim the cost of repairs, or in the worst case you can claim the complete cost of rebuilding your property should it be rendered uninhabitable or completely destroyed. Part of your insurance claim will also provide you with alternative accommodation whilst your home is being rebuilt or made inhabitable. Less destructive events can be covered as well, such as broken windows or floods.

Most insurance companies will make the cover they offer linked to an index, so that it grows in line with inflation every year. You should take the time out to ensure that your policy is adequate for your needs, keeping in mind the fact that land and house prices are likely to be rising.

Any mortgage lender worth their salt will require you to have buildings cover arranged before you are transferred any money. They can't actually force you to take it out with themselves, or the insurance provider they are linked with, however hard they try to persuade you. You can find cheaper rates if you shop around. However, some mortgage lenders will offer you a special deal on your mortgage if you do take out insurance with them, so you should perhaps do your maths.

But really, you shouldn't need your mortgage provider to insist you need buildings cover. If your home was very badly damaged, it is likely that you wouldn't be able to afford to repair it.

You should make sure that from the moment you exchange contracts on a purchase, which is the point at which you cannot pull out without it costing you a lot of money, you have insurance in place. This may be before you move in, but it is still necessary.

 

 

 

 

© AskFinancially.com 2008

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