Building insurance cover
Buildings insurance covers the very structure of your home – the “bricks and mortar” as some people call it – along with its fixtures and fittings.
Normally, you don’t have to arrange your Buildings insurance through your mortgage lender. Naturally, the lender will insist on a suitable policy being taken out so as to protect their interest in the property as much as yours. However, the choice of insurer is usually up to you – just as long as the cover is suitable.
Some lenders may levy a surcharge for you arranging your insurance elsewhere but, in the long run, it may work out cheaper for you to arrange it yourself. On the other hand, it may be simpler to let the lender arrange the policy. This way, you don’t have the annual headache of deciding whether to renew with the same company or to look elsewhere. Also, the annual premium is normally spread over the year, avoiding the need to pay the whole lot at once.
Cost of rebuilding
It is vital to ensure that your Buildings insurance covers the full cost of rebuilding your home. There are widespread tables published to help you assess this cost if your house is of ‘standard construction’. Basically, if your house is brick-built, with a tiled or slated roof, these tables will usually be O.K. If your home is out of the ordinary, you’ll need to get professional advice on rebuilding costs from a local surveyor or other suitably qualified professional.
These tables are simple to use and generally prompt you to answer a series of questions. They will differ from company to company, but generally ask questions like:
Is your home detached, semi-detached, terraced, bungalow?
What region of the country do you live in?
or What is your postcode?
When was your house built?
How many bedrooms do you have?
From your responses, the tables calculate the approximate cost of rebuilding the property per square foot (or per square metre) so it is important to follow the table’s particular instructions. You will then need to measure your house as instructed to work out the area, remembering to allow for any outbuildings such as garages. Then, the area multiplied by the rebuilding cost per square foot (or square metre) will give the approximate cost of rebuilding your type of house.
Don’t forget to account for the cost of gates, fences, walls, paths etc. Once again if you’re in any doubt, speak to the insurance company or an independent adviser.
Be warned that any claims on the policy might well be reduced or rejected if you under-estimate the rebuilding cost and subsequently under-insure your property.