How do you know when to get Buildings And Contents Insurance when buying a house? More Than Money has put together this list for you.
Because we’re nice like that!
Read on for all the answers to the questions you never knew you had.
If you have been asking yourself “Do I need Buildings And Contents Insurance if I have a mortgage?” then read on as I hope to answer just that!
Buildings & Content Insurance
Having Buildings and Contents Insurance when you are buying a house isn’t a legal requirement – but, (and it’s Kardashian-sized one) –
-any mortgage provider you go to is going to insist that you take out Buildings Insurance on the property you want to buy.
This is so they can cover their losses in the event of storm or flood damage, a fire, subsidence etc – basically, as a type of security to protect the loan they’ve given you.
Now, you can just take out Buildings Insurance when you buy a house – but what about the things inside the building?
Unless you’ve decided to denounce all your material possessions and live in a completely empty house, you’re going to want to protect all things you’ve worked hard for over the years.
This includes your jewellery, phones, laptops….clothes, shoes, books…and not forgetting your soft furnishings such as sofas and cushions.
Now, you could take out a separate policy from your Buildings Insurance – with a different insurer even if you wanted, but, as luck would have it – you can combine the two!
Hooray!
This combined type of policy is imaginatively titled ‘Buildings and Contents Insurance’.
What Is Buildings and Contents Insurance?
Put simply, it’s a type of home insurance that covers any damage to your home or it’s contents, including loss, vandalism, and theft.
As I said, you can take the two insurances out separately, but most providers offer them as combined cover, which more often than not will work out cheaper than two separate policies.
So that’s Buildings and Contents Insurance but what does it cover and will it affect your mortgage?
What Does Buildings And Contents Insurance Cover?
As with other types of insurance, the cover provided by your Buildings and Contents Insurance will depend on the individual provider when buying a house and the type of cover you take out.
You could take out a very comprehensive plan, or a more standard cover.
Typically the ‘buildings’ part of your insurance means that you’ll get a payout if there is any damage to your home caused by things such as:
- Fire
- Flood
- Storms
- Subsidence or landslip
- Damage caused by vehicles/falling trees/animals
Most of the structural fixtures in your home will be covered, meaning that they’ll be repaired if possible, and rebuilt if not.
Depending on what type of cover you have this can include:
- Walls/ceiling/roof
- Gates/fences/hedges that exist within the boundaries of your property
- Permanent fixtures and fittings such as the kitchen/fitted wardrobes
- Pipes and cables
- Damage to wallpaper or paintwork
When it comes to the ‘contents’ part of your insurance, again, it will depend on what type of cover you have.
Generally speaking your policy will cover all the things in your home that aren’t fixed to your property, such as:
- Furniture
- Clothes
- Electrical goods
- Jewellery
- Damage to carpets and other soft furnishings
- The contents of your freezer!!
The cheapest type of Buildings And Contents Insurance policy will replace ‘like for like’, so if your 5 year old TV is damaged, your payout will cover the cost of a 5 year old TV.
The more popular option offers ‘new for old’, which would cover the cost of a brand new TV – no matter how old the damaged or stolen one was.
Your insurance policy can also cover things like cash stolen from your home, or the losses on stolen credit cards.
You can even get policies that will cover the cost of having new locks fitted if they’ve been damaged or you’ve lost your keys.
There are other extras you can add to your policy too, such as accidental building damage, (which can be used if for example, you caused any damage while you were doing DIY).
There are also home emergency packages, which allow you to call a tradesman free of charge – helpful if you’re now a homeowner and can no longer just call the landlord!
Of course, you can only claim for the loss and damage of items you’ve listed on your policy in the first place.
So it’s important that you insure everything in your house.
You won’t be able to claim for something as more expensive than you originally valued it for, so it’s important not to over-price things.
Aside from anything else it will mean you paying much higher premiums if on paper your home is stuffed full of thousands of pounds worth of goods!
On the flip side, you don’t want to be under-insuring either, so don’t try and guess how much the contents of each room is worth.
Do some research and get things valued properly.
Be thorough; go into every room in your house and make a list of everything that’s in there.
Don’t forget the loft, garage, and shed – often most of our expensive possessions such as gardening and sports equipment are stored there!.
Be sure to write down the cost of each item.
This total is the minimum amount that you should insure for.
You might want to add a little extra to account for inflation, but your insurer can talk you through that.
It’s also worth making a note of how old the items are in case it makes a difference with the insurance company when it comes to replacing damaged or stolen belongings.
Do I Really Need Buildings And Contents Insurance When Buying A House?
Unless you could afford to replace everything you owned if it was stolen, or could pay for any building work needed due to structural damage on your property, out of your own pocket – yes!
And to be honest, even if you could afford to do those things, why on earth would you, when you can pay a small amount each month to have it all protected?!
If you’re renting you don’t need to worry about buildings insurance – that’s your landlord’s job – but as soon as you become a homeowner it’s a whole different ball game; the responsibility is now yours.
As I’ve already mentioned, when you go to get a mortgage your lender will insist that you have Buildings Insurance, which normally has to be in place from the date you exchange contracts.
The amount of Buildings Insurance you’ll need will depend on how much it would cost to rebuild your property, rather than its market value.
A chartered Surveyor would be able to calculate the amount for you so that you don’t under-insure.
As for the Contents Insurance; no one’s going to insist you have it, it just makes sense to.
And having both insurances combined into a Buildings and Contents Insurance policy means that you only have to worry about corresponding with one insurer and dealing with one renewal.
If there’s anything else you want to know about when to get Buildings And Contents Insurance when buying a house, give our team a call!
We’d love to help!
