Standard home insurance policy types

Standard home insurance policy types

There are varying levels of standard home insurance cover available and Property Advice Blog has listed below the main types of standard policy currently on the market, giving information on exactly what each product entails.

Buildings insurance

Buildings insurance literally secures the roof over your head. Should anything happen to the structure of the walls that house you, this insurance can provide the necessary finance to repair or rebuild your home.

The event which causes the destruction must be deemed completely beyond the dwellers control which usually brings forth the phrase an ‘Act of God’ from unpredictable, fierce weather conditions. It can also be from pipes or electrical wiring throughout the house that may burst and cause floods or spark to cause fire, or from vandalism and damage caused by a third party invasion.

Due to the variety of policies on offer, it is just as important to check what isn’t included in your policy as to what is – but a standard building policy may typically cover the following:

• Structure of your home
• Permanent fixtures and fittings
• Outbuildings (garages, greenhouses, garden sheds)
• Subsidence or landslide
• Water escapement from burst/damaged tanks and pipes
• Vandalism or third party damage
• Accidental damage by animals, vehicles or aircraft
• Storm, lightning and/or flood damage
• Fire and smoke damage
• Explosions
• Fallen trees
• Window breakage
• Sanitary fitting breakage

Permanent fixtures and fittings are deemed those that are perennially attached to your home. These can include kitchens, bathrooms and toilets/basins and also permanently installed interior decorations such as wardrobes, which are specifically fitted to your abode. An easy way to determine the difference between a permanent feature and contents is whether you could take something with you if you moved home.

Much like car insurance with the addition of a courtesy car, some buildings insurance policies can even provide you with alternative accommodation, should your home be unlivable. However, each policy varies and although most buildings insurance policies will usually cover outbuildings for example, they may not stretch to a property’s boundaries which can include fences, hedges, gates, walls, paths, drives or swimming pools.

Unlimited cover

Unlimited cover will protect you from most potential hazards and risks attached to your home. It also ensures an automatic payout or replacement of goods, regardless of cost, should any damage occur. However, even with unlimited cover, a Loss Adjustor would still have to determine the type of damage that has been done and that assessment can greatly affect your chances of compensation.

Optional extras

• On top of standard cover for a small extra cost, there are plenty of add-ons that can increase your buildings insurance protection:
• Accidental building damage – damage which has been unintentionally caused to the property. For example, whilst doing DIY
• Accidental contents damage – unintentional damage to any of the contents within the house
• Personal belongings – possessions such as iPods or computers, covered for theft or damage in and outside the house
• Flat roof insurance – not normally covered in a standard policy, a flat roof brings higher risk from
• Home emergency – for an urgent situation within the house, like a burst pipe; this added extra will cover the high emergency call out costs of a tradesman. It is generally a 24 hour cover that typically covers you up to a certain level of work, which is up to approximately £250 including the call-out charge, labour and materials
• Legal expenses – should an accident occur where another person is injured either within your house or on the grounds of your property, the added extra of legal expenses will cover you for action taken against you

Buildings insurance for landlords

Buildings insurance for landlords is possibly even more vital than your average homeowner, as they don’t live in the property they own themselves. Renting out the day to day responsibility for the structural maintenance means becoming reliant on the conscientious nature of your tenants; so choose wisely but above all, make sure your covered.

Buildings insurance for tenants

As stated above, it is usually the responsibility of the landlord to provide buildings insurance to cover against a burst water pipe for example, but it is generally down to the tenants to provide their own contents insurance to cover their movable belongings within the property that may be damaged as a result of the water escapement.

Property Advice Blog looks at both landlord and tenant options in more detail in ‘specialist home insurance’.

Rebuilding

When choosing a buildings insurance policy for your residence, it is crucial to make sure that should an event take place that results in the devastation of your home; your dwelling is covered for the full cost of a rebuild and NOT the property’s market value. The market value is considerably more as it takes into consideration the land beneath your home. This can attribute to approximately 30% of your property’s total value and is typically unaffected from the same destruction that may have drastically altered your home, such as fire or criminal damage. Also, property values can differ by a huge margin according to location but the material cost of rebuilding a home will be relatively the same. Choosing to ensure the market value over the rebuild costs could significantly and unnecessarily increase your annual premium.

Although not a legal requirement, when you apply for your homeowner loan, most mortgage providers now insist on proof of a buildings insurance policy as a part of their cover, to protect their loan investments. Disasters such as fire’s or floods can totally devastate a home and could leave the dweller and the lender with nothing, and with a loan of that magnitude, the mortgage lender needs the insurance to act as a form of collateral, to know that they will be able to recover their losses.

It’s important to shop around for buildings insurance as it’s essential to find the right policy to suit your specific needs and your budget.

Things to consider before choosing your buildings insurance:

• Rebuild cost vs market value – these figures can differ greatly and you could be paying too much on your annual premium
• Likely risks associated with a property (large trees close to the house, flood plains, subsistence or flat roofs)
• Reducing the potential risks of damage with extra security measures will lessen your premium
• Carefully chosen tenants in a buy-to-let