Building Insurance Rebuilds Your Life In A Crisis
Your home is probably the largest asset you have and getting building insurance is a wide move to protect your financial investment. In fact, mortgage lenders traditionally require homeowners to carry building insurance to protect their interest in the property in the event of damage due to a storm, flooding fire or other unexpected events.
Two Types of Building Insurance
Basically speaking, there are two types of building insurance you can get to cover your property:
1. Bedroom-rated building insurance polices are based on the number of bedrooms in the house. The more bedrooms in the house, the higher the premium regardless of the size of the rooms or the content. A benefit is that most policies have an unlimited sum per room so you aren't stuck with the average cost of a room in the event damage occurs and you should check that your policy includes this feature.
2 Sum-insured building insurance is based on the cost to rebuild your house regardless of the eventuality and even if your entire house blows or washes away. The market value of your home and the sum-insured are not the same and have no effect on each other. The sum insured may be below or above the current property value. To properly calculate the sum insured, you can hire a chartered surveyor to figure to cost of rebuilding rather than trying to estimate it yourself. Often providers index link the policy to update the cost of building automatically as it changes. It is important to let your insurer know about major extensions and improvements to your home, such as a new kitchen. To estimate the sum assured on your own before you hire a surveyor, you can review the guide offered by the Association of British Insurers in association with the Building Cost Information Service.
What Building Insurance Covers
Building insurance will cover the land you own as well as the cost of the permanent structures on it. This can include the outside structure of the home, outbuildings such as sheds or a garage and fixtures such as toilets, fitted kitchens, sinks, walls and fences. Of course it is necessary to check the individual terms of the building insurance policy to ensure everything you want is covered. Usually building insurance policies will cover floods, fire, subsidence, vandalism, riots, earthquakes, falling trees or branches, falling objects from aircraft, impact by vehicles, storms and malicious behavior. Certain policies may even cover frost damage to pipes that connect your house to the mains supply and subsidence may be covered only if previously reported. Accidental damage to permanent fixtures such as glass in your windows and doors may also be covered and homeowners need to carefully review the policy to make sure it covers everything needed.
What Building Insurance Does Not Cover
Certain damage may be exempted from your building insurance policy, such as damage caused by do-it-yourself project and damage resulting from events such as terrorism, war, pollution, radioactive contamination and pressure waves from aircraft.
Having building insurance gives you peace of mind that your valuable home and property are covered in the event of a disaster.