HELPING YOUR CLIENTS UNDERSTAND THE BUILDING INSURANCE

Types of insurance that should be considered for both you and your client to ensure you have the right cover before building work starts.

You should consider both your Liability Insurance and Contract Works Insurance to ensure you have enough cover for the size and type of project you are undertaking.

What is buildings insurance?

Buildings insurance is one of the two types of home insurance policies available. The other is contents insurance which protects your belongings. You can buy both types of insurance separately, or you can buy them as a joint home insurance policy.

Do you need buildings insurance?

Financial protection if there’s damage to the structure of your home, such as the walls, roof and floors. It usually covers damage to fixtures and fittings too.

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 not compulsory, but it’s usually a condition of your mortgage.

If you own your own home, with or without a mortgage, it’s important that this insurance is a top priority.

Do I need buildings insurance if I’m a tenant?

You don’t need to take out if you’re renting a property. This is because it will be your landlord’s responsibility to make sure the right cover is in place.

What does buildings insurance cover?

Exactly what events and issues you’re covered for will vary between different policies and insurers. But most policies will allow you 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.

What types of buildings insurance are there?

There are two types – sum insured and bedroom rated.

• Sum insured

This is where the amount your policy covers you for is based on the estimated cost of rebuilding your home from scratch. It’s not the same as your home’s market value, which might be higher or lower.

The cost of rebuilding your home will increase over the years, so index-linked policies are best. This is because they update the sum insured to reflect the changing cost of rebuilding.

• Bedroom rated

This is where the amount your policy covers you for is based on the number of bedrooms you have.

This typically gives you a very high sum insured to protect you against under-insurance. It also means you won’t need to work out the cost of rebuilding your home.

What to look for when comparing policies

• Index-linked cover – will the amount of cover increase to meet the increasing cost of building materials?
• Unlimited sum insured – with a lot of insurers, and especially when buying online, the sum insured is set very high and your premiums will be fixed. This means you won’t be able to reduce the sum insured to get a cheaper premium.
• Alternative accommodation – will the insurance pay for you to live somewhere else if you can’t live in your house after it’s damaged?
• Excess – how much will you need to pay yourself if you make a claim?
• Escape of water – are you covered for damage from burst pipes or water tanks?
• Accidental damage – does your policy cover you for unintentional incidents that harm the structure of your home, such as smashed windows, damage to kitchen units and holes made in walls? This is usually bought as an add-on.
• Home Emergency Service – some policies include cover for heating and plumbing repairs along with other home emergencies as part of their standard policy. For others, it’s an optional extra. It’s best to shop around, as policies vary widely.
• No-claims discount – will you pay less on your premiums if you’ve gone for a while without making a claim?

PROTECT YOUR WORK

It’s vital to check you have the right levels of cover before you start each new project. You should consider both your Liability Insurance and Contract Works Insurance to ensure you have enough cover for the size and type of project you are undertaking. You should also think about what tools, plant, and materials will be required for each individual project as well as any vacant sites or buildings that should be covered.

HELPING YOUR CLIENTS 

Before the work starts, homeowners should advise their home insurance provider of any improvements or alterations that are to take place in their home. 

If the house increases in size and value or gains additional contents (carpets, curtains, etc) due to the building works, then the insurance will again need to adapt.

Homeowners should ensure they are covered both during and after the work takes place, otherwise their insurance may be invalid.

WORKING TOGETHER

Cover is available for a wide range of projects such as porches, internal alterations, loft conversions, extensions and much more. 

Each of the policies protects against liquidation, faulty workmanship and structural damage to varying degrees, depending on which policy you choose.

If you’re unsure which one you require for the project you’re working on, simply get in touch with  us and we will be happy to assist. Visit Property Contractors 247 and get expert advice now!