Threshold Mortgage Advice

Quick Guide to Buildings and Contents Insurance

Whether you’re purchasing a new build home or a second-hand property on the open market, if you’re taking out a mortgage you’ll need to have buildings insurance in place before you can complete the purchase.

Here, we offer a quick overview of what buildings cover includes, who needs to take it out, and when it’s required. We’ll also look at contents insurance too, a type of policy which offers protection for the personal items and belongings contained within your home.

What is buildings and contents insurance?

Buildings and contents insurance offers you protection for the property you own and the items contained inside it. It’s important to note that buildings insurance refers to the physical structure of your property and its fixed fittings (things like windows, walls and doors).

Contents insurance on the other hand offers protection for removable items that aren’t part of a property’s fabric. These are items such as your furniture, freestanding appliances and clothes and decorative ornaments – in essence, anything you would take with you if you moved from the property in future.

Both contents and buildings insurance are equally important for homeowners to invest in as they offer you financial compensation should your property be broken into, vandalised, or damaged as a consequence of a natural disaster.

What is covered under buildings and contents insurance?

As a general rule most building insurance policies will offer cover for your property’s structure and its fixed fittings, which could include things like toilets, sinks and built-in cabinetry. Some buildings insurance policies will extend to your property’s grounds and outbuildings such as garages too although it’s always important to check this as policies do differ between providers.

Contents insurance refers to your personal belongings and any freestanding items that aren’t fixed in your home, for example a non-integrated fridge, washing machine or oven. The cover can also extend to items you store in your garage, such as bikes, your BBQ or camping equipment (but not your car as this should be covered under a vehicle insurance policy).

Some contents policies will give you the option to insure items you take outside of your home too, such as laptops. Any high value items such as these will usually need to be listed individually on the policy, with the buy-new value (the cost of replacing the item were you to buy it again) also provided to your insurer.

In what situations can I claim on a buildings and contents policy?

You make a claim on your buildings or contents insurance if your home or belongings have been damaged as a result of a natural disaster such as a storm, flood or fire, or as a consequence of vandalism or a break-in. Other situations may also be eligible for cover but each policy is different. As with all insurance you decide to take out, it’s important to familiarise yourself with your policy’s wording to determine what is covered and what is exempt.

What isn’t covered by a buildings and contents insurance policy?

Generally, you won’t be able to claim on buildings or contents cover for accidental damage (unless you’ve added this as a policy extra), nor natural depreciation of items (wear and tear over time). Again, other exclusions may apply, which is why it’s vital you carefully read your policy documents before taking out the cover.

Who is responsible for buildings and contents insurance on my home?

If you own the freehold of your property you are responsible for the building insurance on your home. If you’re buying using a mortgage you’ll actually need to have this cover in place before you move in, either at point of exchange or point of completion depending on whether your home is second hand or new build.

If you rent a leasehold property, such as a flat, the buildings insurance is usually included in the cost of your maintenance or service charge. In either case, it’s your responsibility to insure your home’s contents. That’s because buildings insurance only covers the property’s structure and fixed fittings, and not the decorative, personal, and other non-fixed items within your home.

My landlord has insurance; do I need to take it out?

It’s your landlord’s responsibility to take out comprehensive buildings insurance and contents insurance to cover fixed fittings in the property such as built-in kitchens and bathrooms. As a third party however, your belongings will not be covered under this policy, and so you should also take out a contents insurance policy in your name to protect the items you own.

How do I pay for buildings and contents insurance?

You can pay for a year’s cover in full at the point you take out your buildings and contents insurance, or you can arrange to pay a monthly amount to spread the cost over time. Either way, you’ll be insured for the policy duration.

When does buildings and contents cover start and end?

Buildings and contents insurance policies last for one year, at which point the policy will either automatically renew or your broker will contact you. The dates covered by the policy will be specified in your policy document and you will be able to nominate a cover start date of your choosing.

Ready to insure your home?

For more information about buildings and contents cover for your home, contact Threshold today.

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