Buildings insurance covers damage to the actual structure of your home, such as the roof, walls, floors, ceilings and foundations. For example, if your house is destroyed or rendered uninhabitable, you can claim the cost to rebuild or carry out the necessary repairs.
Normally, you will also be able to claim the cost of alternative accommodation while the rebuilding work is undertaken, as well as any legal costs arising from damage to your home. Buildings insurance may also include outbuildings such as sheds or garages.
Typically, buildings insurance covers:
- Subsidence of the foundations of your home
- Damage by falling objects such as trees, aerials, aircraft parts
- Collision damage, e.g. if someone drives into your home
- Burst pipes, tanks, damaged boilers and floods
- Damage caused during a civil riot
These exclusions vary from policy to policy and between the various insurance companies. It is always worth checking the policy details so that you know the risks you are not insured against.
If you have a mortgage, your lender will insist that you have buildings insurance. If you don’t, it is usually advisable to have buildings insurance anyway to protect yourself.
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Contents insurance covers the ‘material possessions’ in your home, for example, a stereo or iPod, clothes, curtains, carpets and furniture (put simply, contents insurance covers anything that can be moved while buildings cover insures anything that can’t).
In most policies, the cover extends to areas outside the main property, such as a greenhouse, conservatory or garage. However, more expensive items, usually of £1,000 plus — an expensive computer or jewellery, for example — may have to be insured separately as the majority of policies have limits on pay outs.
As a policyholder, you will normally be covered if your possessions are stolen, or damaged, for instance, by fire, flood, burst pipes, boilers or storms.
The important thing is to understand that every policy is different, to always read the small print for exclusions and to shop around for the best cover and price. If you are unsure about anything, always speak to an experienced and professional broker.