Buildings insurance is important if you own your house, because it would pay for your home to be repaired or rebuilt if something went wrong with the fabric of the building, such as subsidence, or if your house suffered a flood or fire. It will also cover damage to your windows, chimney, fixtures and fittings and possibly even damage to neighbouring property caused by, say, falling tiles from your roof.
The key to being able to claim against a buildings insurance policy is ensuring that your house is properly maintained and that all care is taken to make necessary repairs to your house as and when may be required. That’s because your buildings insurance won’t pay for damage to your home if it’s caused by wear-and-tear or lack of repair – so, for instance, it wouldn’t cover water damage caused by loose tiles that were not patched up, or subsidence caused by poor drainage due to blocked guttering and misaligned drainpipes.
The other crucial part of buildings insurance is getting the right level of cover in the first place. You may think that you should insure your building for whatever it would be worth if it was sold. In fact, the market value is irrelevant to how much buildings insurance you’ll need; how much it would cost to rebuild is the figure you need to insure.
The rebuild cost, as you might guess, is how much it would cost to rebuild your home were it ever destroyed by fire, subsidence, earthquake or storm. The property’s market value includes the land your home is built on, so this is typically much higher than a rebuild value. Some insurers have very specific levels of cover available, but this can sometimes lead to customers becoming underinsured as time passes if they don’t frequently reassess the rebuild value of their home. Alternatively, if you choose AXA as your buildings insurance provider they will insure your building for up to £500,000 or £1million depending on the approximate value of your property.
If you have bought your house fairly recently you can find your rebuild cost on any surveyor’s report linked to your mortgage. Or, if you can’t find that document or it’s been a while since that document was created, you can use a special calculator (such as the one available on the NHBC website), or arrange for a surveyor to put a current value on the cost of rebuilding your home.
Finally, if you alter your property, by adding an extension or converting your loft, for example, then it is important to re-value the rebuild costs, since these will probably have increased: you should always inform your insurers if you are making changes to your home anyway, and also alert them to change your cover if the rebuild costs have increased.
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