Welcome to the Building-Insurance-uk.co.uk. Almost anyone who owns a building in the Uk will need insurance, whether they live there themselves or rent it out as a landlord. Although it is not a legal requirement to insure property, If there is a mortgage on the property, the lender will usually insist on a building insurance policy being in place as a condition of the loan. They will also want their interest noted on the policy schedule. Until such time as the loan is discharged, the building remains the property of the lender, and they will want to make sure their financial interest is fully protected in the event of a claim such as a fire or a flood.
Even if you do not have a mortgage or a loan against your building, insurance much good sense as a risk transfer mechanism. You property is likely to be amongst the most valuable things you own, and should you be unlucky enough to suffer a loss, the financial effects could be devastation. Building Insurance offers peace of mind, especially at a time where climate conditions are causing more and more abnormal weather related incidents. The benefit of having a comprehensive building in force easily out ways the cost of the insurance premium and should be considered a priority under any household budget.
There are a large number of product providers for building insurance and the generic name for products on offer may vary from insurer to insurer; you may see such terms are "Householders", "Household Combined" or even "Home Owners Insurance". Whatever the name the "product provider" decides to call their policy, it will contain a wide range of perils that are broadly similar to most other policies on the market. The reason behind this is that insurance for residential properties is usually driven by the requirements of the Council for Mortgage lenders handbook. Most lenders subscribe to this organization, who amongst other things, specify a minimum set of perils to be covered under a policy in order to facilitate the advance a loan on a property. In view of this most building insurance covers are similar with only the peripheral covers and section limits varying from insurer to insurer.
As a property owner, you will require a variety of insurance covers to protect your home. Building insurance to cover the structure of the property. "Contents" cover to protect your belongings in the home and "All Risks" an extension to a "Contents" policy to cover items taken away from the home including such things as jewellery, camera equipment and even pedal cycles. Building Insurance can be written on its own or combined with contents.
In essence building insurance Uk, falls in to two basic types; Residential and Commercial.
These will cover residential buildings, private dwelling houses whether they be detached, semi-detached, bungalows or flats in either purpose built or converted buildings. If a property is rented out to tenants, most insurers will now cover these risks under a personal policy known as a landlord or buy to let insurance. The same applies to holiday homes although there is a commercial element of letting, the policy wording is fairly similar to standard home insurance with a course a few alterations to cover to suit the required usage. It is essential when buying building insurance that you fully disclose the intended use of the property, failure to do so may lead to an incorrect policy being issued which could impact on the cover any claim.
The insurance of blocks of flats or even a single flat in a block often causes much confusion. In essence, they should be insured by the freeholder of the property under a block policy. However, many flats (or tenements) particularly in Scotland where the leasehold laws are different are insured on an individual basis and many other people in the United Kingdom have taken it on themselves for a variety of reasons to insure their own flat particularly where the freehold cannot be located. Where ever possible, buildings converted in to flats, should be insured on a block basis. Any person wishing to sell a flat within a block may have problems persuading their solicitor to exchange contracts without a block policy being in force (not Scotland).
We can provide quotations for single flats with a wording that will also protect the communal interest. Please see our separate page regarding insurance for flats where we have further information.
Definition of Residential Home Insurance.
This can often cause confusion, how do you actually define a building. In the first instance and for insurance purposes, it means the structure of the building itself.; the foundations, walls, floors, doors, windows, roof, plumbing, windows, fixed electrical wiring, decorations and it�s permanent fixtures & fittings. This would include such items as fitted kitchen units, fitted bedroom furniture, toilets, baths etcetera. The general rule is, anything immovable that would be left behind on removal is treated as buildings, and everything else is treated as contents. There are of course some grey areas: fitted carpets are generally treated as contents even if you would leave them behind. It�s best to check on each occasion with the insurer you are considering using. Buildings also extend to include; outbuildings, garages, greenhouses, sheds, paths, drives, walls & patios. Fences and gates are also including under the definition of the building, but some insurers make exclusions on the cover, so it is best to check on the "Key facts" document, regarding the cover you are going to receive.
Finding Adequate Cover
Care is always needed to study building insurance policy wordings, especially the exclusions and warranties, particularly if you live in a flood area or your building has suffered previous subsidence problems. Any significant exclusions of cover should be pointed out by the insurance arranger prior to you accepting insurance cover and mention of it should be made in any supporting documentation.
When arranging a building insurance policy, you must give the insurer all the correct underwriting information. This should enable them to accurately provide you with a quotation. This is called disclosing material facts. Insurance contracts rely on a principle called " Utmost Good Faith" This principle is used in insurance legally obliging all parties to reveal to the other party any information that might influence the others' decision to enter into the contract. Basically, you must tell the insurance company of anything that might make them refuse to sell you a policy, and they must tell you anything which might stop you buying a policy from them (such as excluded cover or a really large excess).
Examples of important underwriting information include If you property is located on a flood plain or has a history of subsidence or is of non-standard construction. These are all deemed to be material facts and need to be disclosed to the insurer.
It is false economy not to disclose full details to an insurer. You may obtain a cheap premium, but in the event of a claim, you may be facing a reduced pay-out or even worse.
Commercial building insurance will cover a variety of property that is used for business purposes. These can either be owner occupied or owned by landlords and rented to tenants. Some commercial properties remain unoccupied for long periods of time, particularly in the current economic climate and these often prove more problematic to insure. Types of risk include shops, offices, factory premises, in fact, any type of building where a commercial activity is carried out. This sector of the market is usually extended to include property such as sports centres, schools, hospitals and buildings that are used for religious worship.
The types of peril covered are broadly similar to a home buildings insurance policy again as often loans or mortgages are used to obtain the purchase. There are of course some slight differences relating to the use of the property.
Although policies will vary from one insurer to another, the core covers, the way that cover is arranged and the way that any claims are handled will be fairly similar. In fact since the selling of general insurance became regulated by the financial services authority (mostly shortened to FSA); the sales process should not vary too much from insurer to insurer. Certainly you should be given a Key Facts document which outlines the basis of the cover and will enable you to make an informed decision as to the suitability of any particular insurance product. Another document you should be presented with is a "terms of business" agreement or "customer charter". This will alert you to whom you are dealing with. Remember though that the "Key facts" document is generic in nature, the actual cover will be tailored made to your own set of circumstances so it is vital you study all documentation carefully.