Buildings and Contents Insurance
Buildings insurance is an insurance policy that can cover the cost of repairing damage or even fully rebuilding the structure of your home if it damaged by an event that you are insured for, such as a fire, flood or storm.
Policies typically include cover for your roof, floors, walls and fences, as well as any permanent fixtures and fittings, like your kitchen and bathroom.
Buildings insurance can also cover outside structures connected to your homes, such as garages and pipes.
Your insurance should cover the full cost of rebuilding your house. This also includes the costs of demolition, site clearance, and architects' fees. It is important to make sure you insure yourself for the amount it would cost to completely rebuild your home. This is called the sum insured. The cost of rebuilding your home is not the same as the price you paid for your home, or its current value if you were to sell it. Rebuild costs are usually less than the current market value as a lot of the cost of purchasing a property is the cost of purchasing the land as well as the building on that land.
Buildings insurance usually covers loss or damage caused by:
a) fire, explosion, storms, floods, earthquakes;
b) theft, attempted theft and vandalism;
c) frozen and burst pipes;
d)fallen trees, lampposts, aerials or satellite dishes; and
There is no legal obligation per se to obtain buildings insurance but considering the vast amount of money we spend on purchasing our homes it would make sense to have buildings insurance to protect that expensive and vital asset - your home. This even more so the case if you live somewhere at a high risk of flooding, crime or subsidence.
In many cases, your mortgage lender might also require you to buy buildings insurance to protect their interest in your asset during the term of the mortgage.
If you purchase a flat as part of a block then it is your landlord, (the freeholder or the lessor), who will purchase the buildings insurance for the whole block and the cost of this policy is usually included in your service charge.
When purchasing a flat in a block, you should always make sure that your interest is noted on the block policy to ensure that you are covered.
Buildings policies usually give you legal liability protection as the occupier and owner of your home. This means that as part of the policy, the insurer will also cover you and your legal costs if the structure injures a passer-by or visitor or damages a neighbour's property.
It is very important that you do not over or under insure yourself and expert advice should be taken to ensuring that the correct insurance and level of insurance is purchased.
Contents insurance is an insurance policy that covers the cost of replacing your damaged personal possessions in the event of theft, loss or damage, including natural disasters, fires or flooding. Different policies cover different risks so it is very important that you look at the actual wording of the each specific policy.
Contents insurance is separate and distinct to buildings insurance which covers the building you live in itself and the fixtures and fittings.
The difference between fixtures and fittings and personal possessions as a general rule is that fixtures and fittings are items that cannot be picked up and moved – they should be insured with your buildings insurance and personal possessions, which can be picked up and moved, should be insured with your contents insurance.
Often insurers ask you to estimate the total value of all your possessions, but insurers require you to notify them of any particularly high-value items, especially jewellery, computers, or expensive bicycles for example.
If you need both building and contents insurance, buying combined insurance can be cheaper and limit any disputes among insurers, for example, if you need to make a claim affecting both the structure of your home and its contents, such as a flood.
Should you decide to buy two separate policies and you need to claim, there may be arguments between your two providers over who should cover what. It is rare, but it is possible.
Contents policies usually also give you legal liability protection as the occupier and owner of your home. This means that as part of the contents policy, the insurer will cover you and your legal costs if a visitor to your home is seriously injured and it is deemed to be your fault.
Not everything is covered, the specific wording of your policy should be checked carefully. For example, contents insurance will not usually cover you against acts of terrorism or general wear and tear.
Please also be aware that many policies may also be invalidated if your home is unoccupied for more than 30 consecutive days during the year. Further, if you are away for a long time and a pipe bursts for example, you again may not be insured in those circumstances.
There is also usually only limited cover for accidental damage.
It is not uncommon to see policies that do not cover you for theft if you sub-let your home and there is no sign of forced entry.
If you run a business from home, or work from home, you should check your policy carefully to ensure that you qualify for liability protection and understand that business related contents may not be covered under a personal contents policy.
It is also vital that you do not over or under insure yourself and expert advice should be taken to ensuring that the correct insurance and level of insurance is purchased.