Richard Lishman discusses the importance of choosing the right buildings insurance for you.
There are certain things that should never be left to chance. Buying a property is a hefty investment, so it is wise to have protection in place – this means taking out buildings insurance.
No one wants to consider an event causing damage or even total destruction to their home/property. But it is important to ensure that should such an event occur, you are thoroughly protected with the right buildings insurance policy.
The low-down on buildings insurance
Essentially, buildings insurance is designed to cover the cost of repairing any damage to the structure of your home/property. Not only does buildings insurance cover the cost of rebuilding your property, but it may also include sheds, fences, garages and the costs of replacing pipes, cables and drains. It is often the case that an individual looking to get a mortgage must take out building insurance, but it does not always have to be provided by the mortgage provider – you can look around and see what options are currently available to you and your situation.
So, what is included?
What is included
Events that are usually covered by buildings insurance include floods, storms and natural disasters like earthquakes. Similarly, theft (or attempted theft), vandalism, fallen objects (like trees, aerials or lampposts), collisions from aircraft or vehicles and subsidence are also generally covered. It is easy to assume that such events are rare and will not happen to you, but some are much more common than one might think.
Fortunately, the UK is a very low-risk country with regard to natural disasters, although some parts of the country can experience severe flooding and storms. It is believed that around one in six homes are at risk of flooding across England. Likewise, events such as house fires are far too common, with almost 27,000 dwelling fires having occurred in the year ending June 2022. So, clearly, buildings insurance is a vital consideration when looking to purchase a property. Like any form of insurance, you should research thoroughly across the market to ensure you choose a policy that covers exactly what you need it to.
Choosing carefully
While some mortgage providers can reject your choice of insurer, they cannot force you to opt for the insurer they recommend.
With regards to the amount of cover you would require, you must insure yourself for however much it may cost to rebuild your property completely. This sum will not reflect the price you paid or whatever amount it is currently valued at if you were to sell. Usually, the cost to rebuild will likely be less than the current market value, but there are many other costs to bear in mind, such as architect fees, demolition and site clearance costs. To more accurately estimate the sum you need to insure for, there are resources like online calculators that can help. You might find that certain insurers provide unlimited coverage, doing away with the need to work out the costs yourself. However, if you do calculate the costs, you could research cheaper policies that still fit your needs and requirements.
There are various other considerations to bear in mind when choosing a provider, which may impact the cost of the policy. For example, the location and size of your property, in addition to whether it is a listed building with historical or special features. Plus, if you are thinking of making any changes to your property, like an extension, then this will influence the cost to rebuild, and therefore, you should ensure you will be covered. The costs associated with rebuilding can fluctuate over time, so it is equally as important to review your buildings insurance cover regularly – you may find that some insurers will automatically increase the amount you are insured for if rebuild costs rise.
The right help when making the right choice for you
Finding the right insurer and policy for you is straightforward when you enlist help from an Independent Financial Adviser (IFA), like money4dentists. They support you when finding the most appropriate cover for your situation, ensuring that you understand the fine print and exactly what you will receive from your policy. Money4dentists provides peace of mind when you need it most.
Buying a home/property is a long and often stressful process, and so buildings insurance may not be high on your priority list. But it is important to take the time to thoroughly research policies on the market, choosing one that will provide adequate protection for your investment.
For more information call 0845 345 5060, email info@money4dentists.com or visit www.money4dentists.com