You’ve secured your pre-approval and found your new home. But have you got your insurance in place?
There is no legal requirement to take out insurance when you get a mortgage except for Buildings Insurance. But basic insurance is still needed before you move in! At the minimum, your lender will want to see Building Insurance. After all, it’s their investment, too.
Without Building Insurance, you would need to foot the bill to rebuild your home - while continuing to pay your mortgage at the same time!
We ask some key questions to help you understand Building Insurance.
What does Building Insurance cover?
Buildings Insurance usually covers loss or damage caused by:
- fire, explosion, storms, floods, earthquakes;
- theft, attempted theft, and vandalism;
- frozen and burst pipes;
- fallen trees, lampposts, aerials or satellite dishes;
- subsidence;
- vehicle or aircraft collisions.
What is Buildings Insurance?
Buildings Insurance covers the cost of repairing damage to the structure of your property. Including garages, sheds, and fences. And even the cost of replacing items such as pipes, cables, and drains.
Your insurance should cover the total cost of rebuilding your house. Plus the hidden demolition costs, site clearance, and architects' fees.
How much Building Insurance coverage do you need?
First, calculate the cost of completely rebuilding your home. For help, check out the Building Cost Information Service online calculator on the Association of British Insurers' website.
It won’t be the price you paid for your home or its current value. Rebuild costs are usually less than the current market value. Make sure you don't over or underinsure yourself.
Some insurers offer unlimited cover, so you don't have to calculate the rebuild costs. However, if you already know what they are, it may be cheaper to shop around for a policy that fits your exact needs.
Do you need extra Building Insurance?
You might want to consider taking out extra Building Insurance to cover for you for other risks. You'll have to pay higher premiums for this cover. You can add on extra insurance for:
- flooding or subsidence if you live in a high-risk area;
- accidental damage to your home;
- alternative accommodation if you have to move out of your home after you've made a claim;
- damage to boundary walls, fences, gates, driveways, and swimming pools;
- damage to underground pipes, cables, gas, and electricity supplies;
- glass in windows, doors, conservatories, and skylights;
- liability cover if someone else's property is also damaged;
- legal expenses cover.
If your property has special features, such as a thatched roof, or is a listed building, you can pay for a survey from the Royal Institution of Chartered Surveyors to assess the rebuild costs.
Remember to regularly review the amount your Buildings Insurance covers. As we’ve seen quite dramatically in recent times, rebuild costs rise over time! And remember, if you improve your home, like an extension or a loft conversion, the rebuild costs may go up. You will need to make sure you're covered.
So, don’t leave protecting your biggest asset up to chance.
Speak with us today about ensuring your home is properly insured
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Reference: https://www.citizensadvice.org.uk/consumer/insurance/types-of-insurance/buildings-insurance