Protect Your Home
WHAT BUILDING INSURANCE COVERS?
Buildings insurance will protect the structure of your home, but not its contents
When insuring your home, you normally need two policies: one for the building itself and another for its contents (see our contents insurance reviews).
Buildings insurance covers the structure of your home (walls, windows, roof, etc) as well as permanent fixtures and fittings (such as baths, toilets, and fitted kitchens). See our for Which? Recommended Providers and Claims Satisfaction Results.
It generally covers damage due to fire, lightning, explosion or earthquake, theft (or attempted theft), riots or vandalism, storms or flooding, subsidence, falling trees, moving objects (such as a car hitting your home), and escaping or leaking water or oil.
If you have a mortgage, your lender will insist you take out building insurance. If you’re a tenant, it’s down to your landlord to arrange it. In other cases, building insurance is not compulsory, but you’d be unwise to do without it.
INCLUSIONS
- Flooding: Currently, there’s an agreement between the government and insurers that insurers will continue to offer cover to existing customers living in areas at high risk of flooding so long as the government commits sufficient money towards maintaining and improving flood defenses. The agreement has just been extended in advance of a new arrangement, called Flood Re, coming online in 2015.
- Subsidence: Damage to your property due to subsidence is usually covered, although there’s often a larger excess (the first amount of any claim you have to meet) for this type of claim – normally £1,000 or more. However, building policies usually only cover subsidence damage to the house itself. Patios, garden walls, driveways, and swimming pools aren’t usually covered, unless your house is damaged at the same time. Storm damage to gates, fences, and boundary walls is normally not covered either.
- Accidental damage: Accidental damage cover on a building insurance policy protects against damage you cause to your building or fixtures and fittings. Standard policies include some limited cover, for example for accidental damage to glass in doors, windows, and skylights, and damage to bathroom fittings such as baths and sinks.
COST OF INSURANCE COVER
The cost of cover (the premium) will be determined by the risk category your insurer places your house into.
The risk category in turn will depend on a number of factors, but the most important one is the likelihood of subsidence. It also depends on the types of claims made in your area, and the chance of storm damage and flooding.
With a sum-insured policy, the cost also depends on the replacement value of your home. A bedroom-rated policy does not require you to calculate this. However, you cannot always tell which type would be cheaper for you, so get some quotes for each type if you can.
Most policies have a standard excess (the first slice of any claim that is not covered) – for example, a £1,000 excess for claims relating to subsidence. You can often get a reduction in the premium (ranging from 15-50%) if you voluntarily agree to a larger excess.
Some policies have a no-claims discount (up to a maximum of 10-40% depending on the company), so your premium falls in subsequent years if you have not made any claim.
You usually pay extra if you pay in monthly installments rather than a single annual premium. A few companies give a 5-25% discount if you buy over the internet.
LEASEHOLDERS
In England, Wales, and the Northern Islands the freeholder is normally responsible for sorting out building insurance for flats. This may be done by a management company appointed by the freeholder (or by the flat owners if they collectively own the freehold).
So if you own a flat, you usually pay for building insurance as part of the service charge. If you do, it’s your right to see evidence of the policy and to inspect it.
If you’re not happy with your freeholder’s choice of insurer, the Housing Act 1996 gives you the right to challenge it via a Leasehold Valuation Tribunal. The Leasehold Advisory Service can provide details and advice.
If it’s up to you to find cover, check out the guidance on buying building insurance. Premiums are based on the property’s rebuilding cost, so a house doesn’t necessarily cost more to insure just because it has been converted into flats.
As with house insurance, policies for flats can be bedroom-rated (where the amount of cover is based on the number of bedrooms) or sum-insured (where cover is based on the cost of your belongings).
Insurers prefer to provide building cover for the flats in a block under one policy, as it’s easier to identify who is responsible for common parts like halls, stairways, and the roof.
EXCLUSIONS
PMI covers the cost of being treated privately, either at a private hospital or in a private NHS bed. It is designed to cover short-term, curable medical problems. Anything that isn’t short-term or curable is likely to be excluded – however each policy is different, so check carefully what is and isn’t included before you buy.
Exclusions
Your policy won’t pay for longer-term treatment such as kidney dialysis, or illnesses such as asthma. Other common exclusions include substance abuse, normal pregnancy, and non-essential cosmetic treatments.
Private medical insurers typically offer a variety of policies with different levels of coverage. Most offer at least one top-level comprehensive policy, a medium-level standard policy, and a lower-level budget policy.
Some insurers also have specialist policies. For example, some policies cover you only when you have to wait longer than six weeks for treatment on the NHS. Other policies are designed specifically for the over-55s or have a special focus on one disease, such as cancer.
Modular policies are becoming increasingly common. These cover you for in-patient treatments but also allow you to add cover for different things so that you tailor-make your insurance package.
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