building insurance when buying a house

April 2024

Building Insurance When Buying A House: What You Need To Know In April 2024

Home purchasing is a substantial commitment that demands careful planning, preparation, and compliance with regulatory regulations. 

Building insurance is a crucial component of house ownership since it offers financial protection against damage caused by unforeseen disasters such as floods, fires, and storms.

This article will cover everything you need about building insurance before purchasing a home in the United Kingdom, including why you need it, what it covers, and how to choose the proper coverage.

Topics that you will find covered on this page

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What is Building Insurance?

Building insurance covers repairing or rebuilding your property in case of damage from unforeseeable occurrences like floods, fires, or storms.

Although building insurance is not legally required in the United Kingdom, most mortgage lenders need it as a loan condition.

Why Do You Need Building Insurance When Buying a House?

Home purchasing necessitates building insurance because it offers financial protection against structural damage. If your property is destroyed by unanticipated events, such as a flood or a fire, you may incur substantial fees to make repairs. 

Building insurance might provide you peace of mind knowing you are financially protected to restore your property.

Preparing to Buy Building Insurance

When purchasing a home ownership building insurance policy, it is essential to comprehend what it covers and how much coverage you want. These are the necessary actions to follow before purchasing property insurance:

Working Out the Rebuild Cost

When purchasing building insurance, you must check that the amount covered is sufficient to cover the cost of reconstructing your property. 

The rebuild cost is the amount, including labour and materials, to rebuild your house. You may use internet calculators to estimate the cost of rebuilding, or you can engage a professional surveyor for a more precise estimate.

Getting a Quote for Buildings Insurance

After determining the cost to reconstruct, you may begin obtaining building insurance estimates. 

To get the most outstanding value, it is vital to shop about and compare estimates from several suppliers. Ensure that you are comparing insurance with comparable coverage levels while evaluating pricing.

Comparing Different Providers and Policies

While evaluating various providers and plans, it is necessary to look beyond the insurance cost.

Consider both the quality of the coverage and the degree of customer service the insurer offers. Choose insurers with excellent reputations and high customer satisfaction scores.

Purchasing Buildings Insurance in Advance of Exchange Day

After exchanging contracts, you should get building insurance without delay. 

Because you are legally accountable for the property as of the exchange date, you must have buildings insurance in place to cover any property damage that may occur before closing.

Understanding Types of Building Insurance Cover

Several forms of buildings insurance coverage are available, and it is crucial to understand the distinctions to choose the policy that best suits your requirements.

Buildings Insurance

A buildings insurance policy covers only the expense of repairing or rebuilding your property if it is damaged by unforeseeable events such as floods, fires, or storms.

Contents Insurance

Contents insurance covers replacing or repairing damaged or stolen personal property. It is essential to know that contents insurance is not required by law, but it is strongly advised.

Combined Building and Contents Insurance

Combination building and contents insurance plans cover the property’s structure and contents. It may be cost-effective and offer complete protection for your home and possessions.

Accidental Damage Protection

Accidental damage coverage is an optional add-on that protects against unintentional property damage, such as a broken window or a spilt drink on the carpet.

Determining whether unintentional damage coverage is included in your policy or if you must purchase it separately is crucial.

Optional Extras Available on Some Policies

Some insurers provide optional extras, like legal or home emergency protection, that may give your property additional safety. Before acquiring insurance, reviewing the policy’s specifics and evaluating if you need these extra coverages is essential.

Buildings Insurance in the UK

Leasehold Properties and Service Charges

When purchasing a leasehold property, you may be legally obliged to pay a service fee to cover the expense of maintaining the building’s shared amenities.

Understanding What Is Covered in Service Charges

The service price may include building insurance. Therefore it is essential to confirm what is covered and if a separate policy is required.

How Those Affect Your Buildings Insurance Cover

If the service fee includes coverage for building insurance, you may not need to purchase a separate policy. Nonetheless, verifying that the coverage given by the service fee suits your requirements is essential.

"Building insurance covers repairing or rebuilding your property in case of damage from unforeseeable occurrences like floods, fires, or storms."

Making an Insurance Claim After Exchange Day

After exchange day, you may file a claim under your building’s insurance coverage if your property sustains damage. Below are the steps necessary to file a claim:

How to Make a Claim on Your Policy

You should immediately call your insurance to report the damage and initiate the claims procedure. You must give documentation of the property’s injury and the repair or replacement cost.

What to Expect from Your Insurer

Your insurance will appoint a claims representative to assist you during the procedure. They will arrange for a surveyor to evaluate the damage and offer a cost estimate for repairs or reconstruction. 

Your insurer will then pay out the insured amount, less any deductible, to cover the cost of repairs or reconstruction.

Types of Building Insurance Cover

Additional Considerations for First-Time Buyers

As a first-time buyer, you must consider extra factors when purchasing building insurance. Here are a few guidelines to help you choose the appropriate cover:

Mortgage Lender Requirements for Buildings Insurance

The majority of mortgage lenders mandate homeowners insurance as a requirement of the loan. Ensure you comprehend the coverage your lender needs and choose a policy that satisfies their specifications.

Managing Mortgage Repayments Alongside Buildings Insurance Costs

Including the expense of buildings insurance in your mortgage repayment budget is essential. Ensure you can pay the monthly premiums and your other monthly costs.

Combined Policy Options for Homeowners

If you own a house, you may choose to combine your buildings and contents insurance policies. This economical alternative may provide complete coverage for other risks to your property and possessions.

Building insurance is a necessary item to consider when purchasing a home. It offers financial insurance against unforeseen catastrophes that might cause property harm. 

While selecting a policy, it is essential to shop about and compare quotes from several providers to guarantee the best deal and value. Knowing the many kinds of available coverage and the regulatory criteria will assist you in selecting the ideal and needed buildings insurance for your needs. 

Based on our study, it makes sense to budget for the cost of building insurance when purchasing a home and have it in place before exchange day to prevent legal complications.

What does building insurance cover?

Building insurance covers repairing or rebuilding your home if a fire, flood, storm, subsidence, or vandalism destroys it. It generally includes the walls, roof and flooring, and permanent fittings like fitted kitchens and bathroom suites.

It may even arrange building insurance to extend to outside structures like garages and sheds. In addition, it may pay for legal responsibility claims if someone is hurt on your property. It is essential to understand that buildings insurance does not protect your property’s contents, which separate house insurance policies coverage.

Types of Building Insurance UK

Does house insurance cover TV damage?

Whether or not a homeowner’s insurance covers damage to a television depends on the coverage. Most regular homeowners’ insurance plans accidentally cover damage to property, including televisions.

Nonetheless, reviewing the policy terms to see if accidental damage coverage is covered and whether there are any exclusions or coverage restrictions is vital. In addition, some plans may only cover televisions up to a particular value, so it is essential to check that your insurance offers appropriate coverage for your belongings.

Does building insurance cover leak windows?

Building insurance may cover leaking windows if an insured occurrence, such as storm damage or a broken pipe, causes them. Nonetheless, it is essential to review the policy’s specifics to see what is covered and if there are any exclusions or coverage restrictions.

However, if the windows leak due to normal wear and tear or a lack of care, they may not be covered by insurance. Maintaining your property is essential to avoid damage and resolve problems swiftly.

Does building insurance cover wall ties?

If wall ties become damaged or faulty, the expense of repairing or replacing them may be covered by building insurance. Nonetheless, it is essential to review the policy’s specifics to see what is covered and if there are any exclusions or coverage restrictions.

In addition, some plans may cover just certain kinds of wall ties or limit compensation for problems before the insurance was purchased. Reading and comprehending your insurance thoroughly is essential to guarantee proper coverage.

What is the building’s sum insured?

The building sum covered is the maximum amount your building insurance policy will pay out if your home is destroyed and must be rebuilt from the ground up. It is essential to verify that the amount insured appropriately represents the worth of rebuilding your house, considering its size, structure, and location.

In the case of a complete loss, you may only get adequate compensation to reconstruct your property if the amount insured is sufficient. Inversely, if the amount covered by the existing policy is enormous, you may be overpaying for insurance.

Does homeowners insurance cover ceiling damage?

Most ordinary homeowners’ insurance plans cover accidental ceiling damage, such as that caused by a leaky roof or broken pipe. Nonetheless, reviewing the policy terms to see if accidental damage coverage is covered and whether there are any exclusions or coverage restrictions is vital.

In addition, if the damage is caused by normal wear and use or neglect, it may not be covered by insurance. Maintaining your property is essential to avoid damage and resolve problems swiftly.

Does building insurance cover leaks?

Leaks that are triggered by an insured occurrence, such as storm damage or a broken pipe, may be covered by building insurance. Nonetheless, it is essential to review the policy’s specifics to see what is covered and if there are any exclusions or coverage restrictions. 

However, if the leaks result from normal wear and tear or a lack of maintenance, insurance may not cover them. Maintaining your property is essential to avoid damage and resolve problems swiftly. 

If you find any leaks, you should call your insurance provider immediately to report the damage and see if your policy covers it. Depending on the policy, temporary repairs may also be covered to avoid additional damage until a permanent solution is determined.

Does building insurance cover ceiling collapse?

Building insurance may provide coverage if an insured occurrence, such as storm damage or subsidence, causes the ceiling to collapse. Nonetheless, it is essential to review the policy’s specifics to see what is covered and if there are any exclusions or coverage restrictions.

In addition, the collapse may not be covered by insurance if it is caused by normal wear and tear or a lack of maintenance. Maintaining your property is essential to avoid damage and resolve problems swiftly.

Does house insurance cover TV falling off the wall?

Whether or not a television falling from the wall is covered by homeowner’s insurance depends on the coverage. Most regular homeowners’ insurance plans accidentally cover damage to property, including televisions.

Nonetheless, reviewing the policy terms to see if accidental damage coverage is covered and whether there are any exclusions or coverage restrictions is vital. 

In addition, if the television was not fastened to the wall securely, the insurer may claim that the damage was caused by improper installation rather than an accident and may thus refuse to pay the cost of repairs or replacement.

Preparing to Buy Building Insurance

What is the building’s sum insured?

The building sum covered is the maximum amount your building insurance policy will pay if your home is destroyed and must be rebuilt from the ground up. It is essential to verify that the amount insured appropriately represents the worth of rebuilding your house, considering its size, structure, and location.

In the case of a complete loss, you may only get adequate compensation to reconstruct your property if the amount insured is sufficient. Inversely, if the amount covered is vast, you may be overpaying for insurance. 

It is crucial to routinely check your policy and alter the amount of coverage if your property has undergone substantial modifications.

What is the legal requirement for building insurance when buying a house?

Although building insurance is not legally required in the United Kingdom, most mortgage lenders need it. 

This is because the mortgage provider wants to guarantee that the property is protected from unanticipated disasters, such as floods and fires, and that the property’s value is safeguarded.

Is it necessary to buy building insurance when buying a new property?

Purchasing Building insurance is required when purchasing a new home. Due to structural issues and the fact that you become legally liable for the property after contracts are exchanged, you must have buildings insurance in place to cover any damage that may occur to the whole property before closing.

Can you buy building insurance from your insurer?

Sure, you may get buildings insurance from your own insurance company. When choosing an insurance company, evaluating costs and coverage levels is essential to ensure you are receiving the most excellent offer. 

Building insurance from the same insurer as your house insurance policy is suggested to streamline the procedure and earn a discount.

What is the rebuild value, and how does it differ from the current market value?

In the case of a complete loss, the rebuild value is the projected cost to reconstruct your home from the ground up, including personnel and materials. When acquiring building insurance, it is crucial to calculate the proper rebuild value to ensure that you have enough coverage.

The property’s current market value is the amount it is worth on the current market, which may vary from its rebuild value. Often, the rebuild value is less than the current market value since it just accounts for the cost to reconstruct the building, not the land or location.

What is an accidental damage cover, and is it necessary?

Accidental damage coverage is an optional add-on that protects against inadvertent property damage, such as a broken window or a spilt drink on the carpet. Personal choice and risk aversion determine whether or not accidental damage coverage is essential. 

Evaluating your insurance to discover if accidental damage coverage is covered or must be purchased separately is essential.

What is Building Insurance

What is the legal responsibility of the seller’s home insurance?

After the exchange of contracts, the seller’s homeowner’s insurance is no longer legally liable for the property. 

You become legally accountable for the property as soon as contracts are exchanged, and you must acquire buildings insurance to cover any damage that may occur before completion.

What is the rebuild value, and how does it differ from the current market value?

In the case of a complete loss, the rebuild value is the projected cost to reconstruct your home from the ground up, including personnel and materials. When acquiring building insurance, it is crucial to calculate the proper rebuild value to ensure that you have enough coverage.

The property’s current market value is the amount it is worth on the current market, which may vary from its rebuild value. Often, the rebuild value is less than the current market value since it just accounts for the cost to reconstruct the building, not the land or location.

What is the legal responsibility of the estate agent in purchasing building insurance?

When acquiring a home, the real estate agent is not legally responsible for securing building insurance. The buyer is responsible for obtaining building insurance before the contract exchange. 

Nonetheless, the real estate agent may guide relevant insurers and coverage levels to aid the buyer in securing enough coverage.

What is the service charge, and is building insurance included?

You may be obliged to pay a service fee when acquiring a leasehold property to cover the cost of maintaining common facilities. Confirming what is covered and whether a separate policy is necessary is crucial.

Meet the author

Jane Parkinson

Jane Parkinson

Jane is one of our primary content writers and specialises in elder care. She has a degree in English language and literature from Manchester University and has been writing and reviewing products for a number of years.

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Frequently Asked Questions

Do I need building insurance when purchasing a new property in the UK?

Although building insurance is not legally needed when purchasing a new home in the United Kingdom, most mortgage lenders will demand it. This is because they want to safeguard the property financially in the case of accidental damage. Hence, if you purchase a home with a mortgage, you will probably be required to get building insurance.

Can I use my insurer when purchasing building insurance for a new property?

While you can use your current insurer when acquiring building insurance for a new home, looking around for the best rate is prudent. Your mortgage provider may have a recommended insurance provider or their policy, but you should research costs and coverage levels to get the best deal for your requirements.

What is the rebuild value, and why is it important to consider when purchasing building insurance?

Rebuild value is the projected cost of reconstructing your home from the ground up, including raw materials and labour costs. This will decide the maximum amount your policy will pay out in the case of loss or destruction. If you under-insure your property, you may need more compensation to rebuild it from scratch, and if you over-insure it, you will pay more for insurance than is required.

What other risks should I consider when purchasing building insurance for a new home?

In addition to the primary hazards covered by most buildings insurance plans, such as fire, water, and storm damage, you may consider additional risks when acquiring coverage. For example, you may add incidental damage insurance to your policy to protect against damage caused by ordinary incidents, such as a spilt drink on the carpet or a broken window. You may also consider extra coverage for falling trees, broken pipes, and structure damage. It is essential to thoroughly analyse the policy terms and evaluate any potential hazards unique to your new residence.

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