Moving house? Buildings insurance is usually compulsory if you are taking out a mortgage on your new property. Here’s all you need to know about what it covers and when you need to take out a policy.

Your mortgage lender will want you to take out buildings insurance for your new house before you move in, so it’s important not to leave it until the last minute. While your attention will understandably be on getting ready to move, it’s important to arrange cover in plenty of time so that your new property is protected.

When should you take out buildings insurance?

Your buildings insurance should commence from the date you exchange contracts. If you already own a property, you might be able to transfer your existing cover to your new home without having to take out a new policy. Speak to your existing insurer for further advice.

Remember that exchange of contracts is when you have legally committed to buying the property, so it will be your responsibility from this date. Simply put, you are responsible for insuring your new home during exchange and completion. Your vendor will usually cancel their buildings cover when you exchange contracts.

What does buildings insurance cover?

Buildings insurance covers everything that is part of the house. This typically means the structure of your property, including the walls, floors, roof, garage, and solar panels as well as sheds and fences. It will also cover drains, cables, and pipes. If something serious happens, like a fire, your buildings insurance will cover the full cost of rebuilding the property.

What doesn’t it cover?

Buildings insurance doesn’t cover insect or rodent damage, mould or general wear and tear.

Why should you plan ahead?

It’s best not to leave it to the last minute to arrange cover, as you don’t want to be rushing to organise cover the day before you exchange contracts. Give yourself plenty of time to shop around so that you get a competitive premium. You can set a policy up in advance (usually 30 days beforehand) so that it starts on the day you exchange contracts.

What if you’re buying a new build house?

You may think you don’t need insurance on a new property, as it comes with a ten-year warranty. Buildings insurance is not compulsory on a new build property, but it is advisable to have it. The warranty you’ll get on a new build home will offer you some protection, but it won’t cover everything. Buildings insurance is likely to be more comprehensive.

If you are looking to get insurance on a new build home, we recommend starting the process early as a new property with a new postcode may not be on insurers’ systems straight away. This means it can take longer than usual to get the cover arranged.

Should you buy buildings and contents cover together?

This is worth looking into as it can be cheaper to get buildings and contents insurance at the same time, rather than having two separate policies.

Do you need buildings insurance if you’re buying a flat?

You don’t legally have to take out buildings insurance if you are buying a flat, but your lender may want you to have cover in place before they go ahead with your mortgage. However, if you are going to be a leaseholder of a flat, then the person who owns the freehold should arrange buildings cover for the entire building. If this is the case, you are most likely to be paying those insurance costs indirectly by paying an annual service charge. Check the situation with your freeholder first.

If you jointly own the freehold with other leaseholders, then you are all collectively responsible for insuring the building.

Buildings insurance on flats will cover the structure of the building (walls, footpaths, private garages, and permanent fixtures) and will also cover it against flood, fire, vandalism, and theft.

As with buying a house, we also recommend taking out contents insurance so that your personal items are covered.

What will an insurer need to know about your new property?

When applying for a quote, the insurer will typically ask what type of property you are buying, e.g., house, flat, bungalow, and the type of house it is – such as mid-terraced, semi-detached or detached. They will ask about the number of bedrooms, living rooms and other rooms, and the approximate year the house was built.

They will also ask what the building is made of, i.e. stone, bricks or concrete, what the roof is made of (slate, tile, concrete) and how much of the roof is flat. They will also ask if there are any trees within close proximity of your home.

They will ask about the history of your home too, i.e. has it been flooded in the past, had cracks on external walls or suffered from subsidence. The more information you have to hand about your new home the better.

How much should you arrange cover for?

You should have enough insurance to cover the rebuilding cost of your home, so that if it was destroyed in a fire, the insurance would cover the rebuild. However, the rebuild costs are usually lower than the value of your home.

The rebuild cost of your home should be on your mortgage lender’s valuation, or you can use a free online calculator. For more information on calculating the rebuild cost of your home, visit the website of The Association of British Insurers.

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