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What is buildings insurance?

When looking to secure home insurance for your property, you
should know that there are two main types: buildings insurance
and contents insurance.

Buildings insurance policies deal with the actual house or flat
itself meaning the structure - the walls, floors, roof, windows
and the electrical wiring and plumbing of the property. In
addition to  this, the actual land that your property is
located on is covered as part of this type of home insurance.
There are variants on the basic buildings insurance policy –
for instance, some may incorporate outer structures such as
a shed, garage, greenhouse, fences and gates – and most will
include permanent home fixtures, such as kitchen and bathroom
fittings.

Essentially this type of home insurance policy covers
everything that is a permanent part of the home and would
not be taken away if the resident moved. If you choose a
comprehensive buildings insurance policy, you may also be
covered in the event of having to seek temporary alternative
housing, should your home suffer fire damage or some other
damage relevant to those areas described earlier.

How much cover will you need? 
It is likely that, if you take out a mortgage on your home,
the lender will require you to take out a buildings insurance
policy. During the process of securing a mortgage, your home
will be subject to a rebuild survey, designed to provide an
estimate of how much it would cost to rebuild the property in
the event of it being radically damaged.  It is the figures
from this rebuild estimate that will be used by your chosen
insurance company to determine the rate of your premiums.
Therefore, if you wish to take out a buildings insurance
policy but don’t have a mortgage, you will still need to
have a survey done.  This is necessary as much for you as
for the insurance company, as you  need an accurate estimation
of the amount of cover you will require in  order to provide
you with the appropriate financial support as and  when you need it.

Rebuild and market value differences

If your property is located in a particularly desirable
residential location, it is likely to have a high market value.
However, as the rate of your insurance will be calculated based
on the rebuild value, this is unlikely to be equal to the sum you
would get for selling the property.  Ultimately, whether you choose
separate buildings and contents policies, or a single home insurance
policy that covers both areas, can depend on the offers available
from insurance companies.  Separate policies can also make sense
for those renting out properties, as the contents will then not be
their concern.