Buildings Insurance

A policy covering the structure of a house or other building against a number of different risks. Most policies cover damage to their home by: fire, lightning, explosion, earthquake, thieves, riot and malicious persons, storm and flood, aircraft or things falling from them, subsidence, landslip and heave, falling trees, impacts by vehicles or animals, breakage or collapse of aerials, escape of water from tanks or pipes, or escape of oil from fixed heating installations.

All lenders require a property to be insured. It should be insured for the full rebuilding cost including professional fees and such insurance cover is normally a condition of the mortgage. NB The full rebuilding cost will normally differ from (and be substantially lower than) the mortgage valuation of the property.

It covers the cost of rebuilding or repairing the structure of the property. Lenders insist you have enough buildings insurance before they give you a mortgage. With leasehold properties, it is the freeholder’s responsility to arrange buildings insurance, although the freeholder will usually pass on the charges to the leaseholder.

Insures against structural damage of the property. A lender will insist this is taken out to protect the property, which acts as collateral on the loan.