What is buildings insurance?

Our home insurance underwriters know the ins and outs of buildings insurance. In a nutshell, it protects you financially by covering the structure of your property, should the worst happen.

This includes walls, windows, roofs, and even fixtures and fittings like your bath and toilet. So when there's a problem, you'll receive financial and practical support to help you repair and restore your home and put it back the way it was.

It's not a legal requirement, but most mortgage providers require buildings insurance as part of their loan agreement, as it helps safeguard both their investment and yours. This is because your mortgage lender has a financial stake in your property and needs assurance that the structure is protected against unexpected damage.

Whether you're an owner, occupier or landlord, buildings insurance provides crucial protection. 

Buildings and contents insurance explained

Buildings insurance protects the physical structure of your house – the walls, roof, floors, and permanent fixtures like your fitted kitchen and bathroom.

Contents insurance, on the other hand, safeguards your personal belongings inside the home, including furniture, appliances, and valuables.

Think of it this way: buildings insurance covers everything that would stay put if you turned your house upside down, while contents insurance protects everything that would fall out.

While your mortgage provider will likely require you to have buildings insurance, contents insurance is optional – though highly recommended to protect your personal belongings. Many homeowners choose to combine both types of cover for comprehensive protection, making sure both the structure and everything inside are protected against damage, theft, and other covered risks.

The Association of British Insurers (ABI) provides access to rebuild cost calculators that make estimating your home's rebuild value straightforward. For standard brick-built homes, these online tools can provide a reliable estimate based on your property's size and location.

When calculating your rebuild cost, consider these key factors:

• Age of property (older homes often cost more to rebuild).
• Non-standard construction materials (timber frames, steel structures).
• Roof type (particularly tile roofs or thatched roofs).
• Special architectural features or extensions.

We recommend reviewing your rebuild cost annually, as construction costs fluctuate with material and labour prices. If you've made significant improvements to your home, such as an extension or loft conversion, be sure to update your insurer to maintain adequate cover.

Buildings insurance provides vital protection for your home's structure, but costs can vary significantly. Understanding the average premiums, what affects them, and how to save can help you find affordable coverage without compromising on protection.

Several key factors determine how much you'll pay for buildings insurance:

• Location
  Properties in high-risk areas face higher premiums
• Claims history
  Previous claims can significantly increase your premium
• Building Work
  Recent extensions or renovations may affect your rebuild cost
• Property size and type
  Larger homes with more rooms typically cost more to insure
• Security features
  Better security measures can reduce your premium

The rising cost of repairs due to extreme weather events has also impacted premiums, with insurers paying out record amounts for weather-related damage in recent years.

While there's no legal requirement in the UK to have buildings insurance, most mortgage lenders will insist you have it in place from the moment you exchange contracts. This isn't just a suggestion—it's typically a mandatory condition of your mortgage offer.

Your buildings insurance must cover at least the outstanding mortgage amount, though it's advisable to insure for the full rebuilding cost of the property. Your lender should give you a choice of insurer or allow you to choose one yourself, rather than forcing you to use their own policy.

If you're buying a leasehold flat, the buildings insurance may be arranged by the freeholder or management company, but you should confirm this with your solicitor.

You should arrange for your buildings insurance to start on the day you exchange contracts—not on completion day. This is because once contracts are exchanged:

• The property becomes your legal responsibility.
• You're liable for any damage even before you move in.
• The Standard Conditions of Sale (5th edition) recommended by the Law Society places this responsibility on the purchaser.

When setting up your policy, be upfront with your insurer about the property's status between exchange and completion, including who's living there and when you plan to move in. Your mortgage provider may also require evidence that appropriate insurance is in place before releasing funds.

After completion, you'll need to ensure your buildings insurance is registered with HM Land Registry, noting your lender's interest in the property as part of your mortgage agreement.

When it's time to protect your property, getting the right buildings insurance is essential. Before you start comparing quotes, it's helpful to know what information you'll need and what key policy features to look for.

To get an accurate buildings insurance quote, you'll need to have these details ready:

• Property age and type.
• Location.
• Rebuild cost.
• Construction materials.
• Service charges.
• Previous claims history.

Remember, most mortgage lenders require buildings insurance from the date you exchange contracts, as that's when you become legally responsible for the property.

While it may be tempting to choose the cheapest option, make sure you're getting the protection your home truly needs.