Money Advice Service

If you own your own home, you’ll need to have buildings cover just in case your home is damaged and needs a repair. It’s usually a condition of your mortgage and, if you’re a landlord, it’s your responsibility – not your tenants. Although it’s not compulsory, if you own your own home this sort of insurance should be a top priority.

What is home insurance?

Home insurance is a general term used to describe two very different types of insurance:

  • Buildings insurance – for permanent fixtures and fittings, like kitchens and bathrooms
  • Contents insurance – for things you keep in your home, like furniture, TVs, personal belongings and some types of flooring including carpets

You can buy both types of insurance separately, or in many cases, you can get them as a joint policy from one insurance company.

What is buildings insurance?

This is a policy which covers damage to the structure of your home such as the walls, roof and floors.

It usually covers damage to fixtures and fittings too.

So if you’ve got a fitted kitchen or bathroom, your insurance is likely to pay for any repairs you need.

What does buildings insurance cover?

According to AXA the average claim for a burst pipe is £25,000.

It covers the cost of repairing or rebuilding your home if it’s damaged.

Policies vary from one insurer to another in exactly what events you’re covered for.

However, generally speaking you’ll be able to claim if your home is damaged by:

  • vandalism
  • subsidence
  • falling trees
  • fire, smoke, explosions
  • car and lorry collisions
  • water damage from leaking pipes
  • oil leaking from your heating system
  • natural events such as storms and floods.

Depending on the type of policy you get, it might also cover other structures around the home such as garages, outside walls and driveways.

What buildings insurance doesn’t cover

You won’t be covered for general wear and tear and each policy will have its own exclusions (things you won’t be able to claim for).

These often include damage caused by:

  • leaking gutters
  • some pests (for example, insects and birds)
  • frost (unless it causes damage from a burst pipe)

You can’t normally claim for loss or damage which happens whilst your property has been left unoccupied for more than 30 or 60 days.

Many insurers will let you arrange cover if you let them know in advance.

Storm damage to gates and fences is also unlikely to be covered.

Exclusions vary from one policy to the next so make sure you read the policy carefully.

Do you need buildings insurance?

If you own your own home or are renting out a property then you’ll need to have buildings insurance.

Your mortgage will usually include this as a condition, so not having a policy in place could put your mortgage – and your home – at risk.

You don’t need buildings insurance if you’re renting a property, because it is your landlord’s responsibility to sort out a buildings insurance policy.

If you’re a tenant, you might want to consider taking out home contents insurance cover.

Do you need contents insurance?

Do you need buildings insurance if you own a leasehold flat?

If you own a leasehold flat, the building might be insured by the landlord who owns the freehold.

Your solicitor will be able to advise you if your lease means you have to take out buildings insurance.

If you live in a flat where the leaseholders have clubbed together to buy a share of the freehold from the landlord then you might have to arrange buildings cover.

You can do this individually, but it might be cheaper and easier to get together with people in the other flats and take out a block policy to cover you all.

An insurance broker can help you with this.

Buildings insurance – What are the pros and cons?

  • Repairing your home can be expensive and it costs an average of £263 a year for buildings only policies (Source: ABI Premium Tracker). Comparing the various policies on offer can save you some money.
  • Insurers are adding more and more exclusions to their policies so you’ll need to read the small print carefully.
  • You might have additional excess limits on your policy, for example up to £1,000 for subsistence claims, but this can still be cheaper than paying the whole lot.

Next steps

Make sure you have enough cover. Being underinsured can be a costly mistake.

Check what cover you need in our guide Buildings insurance – how much cover do you need?
Find out how and where to buy buildings insurance in our guide, Home insurance – how to get the best deal.

This article is provided by the Money Advice Service.