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Building And Contents Insurance

Building and contents insurance is one of the most essential types of coverage property owners can get. This article gives you all the details about this insurance type and why you need one.
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If you’re a property owner, then it’s a must to have building and contents insurance on the top of your to-do list.

While building insurance helps provide financial aid in the event of your property being damaged, contents insurance protects you against damage or theft of the contents inside your property.

So, are these two insurance types sold separately, or are they a combo you always have to get together? 

And what is the extent of coverage of these insurances? We’re going to discuss all of this and more today.

What is Building Insurance?

Buildings insurance provides essential protection against the expenses associated with repairing or reconstructing your residence in the event of damage or destruction.

This type of insurance safeguards the fundamental structure of your home, encompassing elements such as the roof, walls, and windows, along with permanent fixtures and fittings like built-in kitchen units and bathroom suites.

In the case of flats, building insurance extends coverage to communal spaces like staircases and hallways. 

Additionally, it includes liability cover, offering financial protection in scenarios where a visitor sustains injuries while on the premises.

What is Contents Insurance?

Contents insurance safeguards all the belongings you would transport when relocating, encompassing items such as furniture, kitchen appliances, curtains, bedding, clothing, electronics like televisions and computing equipment, and jewellery.

However, it’s important to note that contents insurance does not extend coverage to the physical structure of your dwelling, such as the roof, walls, and windows. 

Permanent fixtures and fittings like fitted kitchen units and bathroom suites are also excluded from contents insurance but can be covered separately with building insurance.

Buildings And Contents Insurance Coverage

Building Insurance And Contents Insurance

Building and contents insurance provides comprehensive protection against various types of damage, including:

  • Weather-related incidents such as storms and lightning.
  • Floods, safeguarding your property from water damage.
  • Burst or frozen pipes, excluding coverage for pipes that burst due to age or corrosion.
  • Fire or explosion, ensuring financial security in the event of such emergencies.
  • Subsidence that occurs when the ground beneath your home shifts, potentially causing foundation issues.
  • Theft and vandalism, covering losses incurred due to unlawful activities.
  • Damage caused by falling trees or branches.
  • Collisions involving vehicles or other traffic impacting your property.

Additionally, most policies offer provisions for alternative accommodation if your home becomes uninhabitable due to a covered event.

Regarding subsidence, most building insurance policies will cover this unless it has occurred previously. However, obtaining competitively priced coverage might be challenging if your property has experienced subsidence. 

It’s essential to review the terms and conditions of your insurer to understand the specific coverage offered, as these details may vary between providers.

Parts of Your Property Usually Not Covered

Every insurance policy, including buildings and contents insurance, comes with its exclusions. These exclusions determine what is and isn’t covered by the policy. 

While the specifics may vary depending on the insurer and the policy chosen, there are some common exclusions to be aware of.

For contents cover, typical exclusions may include damage due to wear and tear or losses resulting from computer viruses. 

Additionally, coverage for valuables might be subject to single-item limits, often around £1,500. If you possess high-value items like fine art or

jewellery exceeding this limit, it’s advisable to consider supplemental coverage to adequately protect these possessions.

Common exclusions often include:

  • Wear and tear
  • Damp
  • Damage caused by neglect or poor workmanship
  • Weather damage to fencing or gates, such as from storms
  • Frost damage to pipes and brickwork
  • Damage attributed to birds, insects, or pests

The coverage for certain issues, like a leaky roof, can depend on the circumstances. For instance, a leak caused by a storm damaging roof tiles might be covered, whereas one resulting from the roof’s age or wear and tear may not be.

Similarly, if structural changes to the building, such as adding an extension, are desired, they typically wouldn’t be covered. 

However, if underpinning is necessary due to exterior damage, such as subsidence, it should fall under the policy’s coverage.

Choosing an insurance policy requires thorough research to ensure a clear understanding of its terms and conditions, enabling you to determine what is eligible for claims and what isn’t. This knowledge empowers you to make informed decisions regarding your coverage.

Amount of Coverage You Need

Ensuring you have the appropriate level of insurance is vital, prompting the question: how much Contents Insurance do I need? 

When selecting a policy, it’s crucial to ensure you’re covered for the complete rebuilding cost of your home. 

This figure, known as the sum insured, may differ from the property’s purchase price or its current market value. 

Rebuilding costs typically amount to less than the property’s current value, necessitating a careful balance to avoid either over or under-insuring yourself.

While some insurers offer unlimited cover, thus eliminating the need to estimate rebuild costs, securing a policy tailored to your needs could be more cost-effective.

Seeking assistance from an insurance professional can aid in identifying a policy that aligns with your budget and insurance requirements if you’re uncertain where to begin.

Given that rebuild costs tend to escalate annually, regularly reviewing the coverage provided by your building insurance is prudent. Moreover, as property enhancements are made, rebuild costs will increase accordingly. 

While many insurers offer policies that adjust to accommodate these rising costs, it’s essential to confirm this with your provider as it may not be automatic.

Maintaining an awareness of these factors ensures you remain adequately protected and prepared to adjust your insurance coverage as needed.

Difference Between Warranty And Building And Contents Insurance

When deciding between building and contents insurance and warranty for your home, understanding their distinctions is crucial for making the right choice.

A warranty typically covers the repair or replacement of home appliances and systems due to wear and tear, offering protection regardless of the appliance’s age. 

Notably, warranties like the NHBC warranty for new build developments safeguard against defects or damages resulting from construction work, with coverage extending up to 10 years. 

However, warranties, including NHBC’s Buildmark, don’t shield against wear and tear, elemental damage, or accidental harm, highlighting the value of building insurance.

On the other hand, contents insurance safeguards against unforeseen events such as theft, vandalism, weather-related damage, or fires, ensuring coverage for property rebuilding or replacement costs. 

While contents insurance addresses unexpected incidents, warranties primarily cover anticipated appliance breakdowns. 

Combining both can provide comprehensive coverage, especially for newly built properties, effectively filling any gaps left by the warranty.

Frequently Asked Questions (FAQs)

1. Is building insurance mandatory for homeowners?

Buildings insurance is not legally required by law for homeowners, but it’s often a condition of mortgage lenders to have adequate cover in place to protect their investments.

2. What factors affect the cost of contents insurance?

The cost of contents insurance is influenced by factors such as the value of your belongings, your location, the level of coverage you choose, and any additional optional extras like accidental damage or cover for high-value items.

3. Can I purchase building and contents insurance separately?

Yes, you have the option to purchase buildings and contents insurance separately or as a combined policy. Many insurers offer discounts for bundling both types of coverage together in a single policy.

George Rogers LendingLine
CeMAP & CERER Qualified Mortgage Adviser

I am CeMAP & CERER qualified mortgage adviser and have helped a number of clients realise their dreams when they thought it would not be possible. I’m skilled at getting mortgages sorted for people with a history of missed payments, CCJs, defaults, debt management programmes, IVAs and bankruptcies.

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